Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Palestine Liberation Organisation

Mr. Cunliffe: asked the Secretary of State for Foreign and Commonwealth Affairs whether further meetings such as that between the Minister of State and Mr. Farouk Qaddumi of the Palestine Liberation Organisation are planned.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Francis Pym): There are no such meetings planned at present.

Mr. Cunliffe: In view of the Palestine Liberation Organisation's rejection of the Israeli-Lebanese agreement at a recent meeting, will the Foreign Secretary now acknowledge that the PLO has no intention, through negotiations, to recognise the state of Israel as such? Does the right hon. Gentleman think that the meeting was counter-productive? Furthermore, in view of the disposition of the PLO and its efforts to achieve its objectives by terrorism, is it not negative to arrange any further ministerial meetings?

Mr. Pym: No such further meetings have been arranged. I thought that the meeting would be helpful. It was a suggestion that we made some months before. It was possible for my right hon. Friend the Minister of State to make it clear that the PLO had missed a golden opportunity of making progress with a peace plan.

Mr. Marlow: Is it likely that the PLO will move in any way whatever towards recognition of Israel at a time when the Israelis seem to be daily announcing the expansion of settlements in Palestinian territory on the West Bank?

Mr. Pym: I think it is fair to say that in recent months and over the past year or so the PLO has, by implication, taken steps and made statements that were moving in the direction of that recognition. It has not made such a recognition yet, as we know, but the implication is that its thinking has been in that direction.

Mr. George Robertson: Did the Prime Minister approve of the meeting and, if so, when will she publicly say so?

Mr. Pym: Yes, of course.

Mr. Adley: What word would my right hon. Friend use to describe the behaviour of the Israelis in Lebanon?

Mr. Pym: I made my position and that of the Government clear when Lebanon was invaded. It is a great

relief to everybody, and certainly to the House, that agreement has been reached and that there will be a withdrawal.

Iran-Iraq (Hostilities)

Mr. McWilliam: asked the Secretary of State for Foreign and Commonwealth Affairs what new initiatives Her Majesty's Government and their European partners are taking to bring about a cessation of hostilities between Iran and Iraq, especially in view of the fact that there is an escalation of the war.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): We deeply regret the continuation of the war between Iran and Iraq, and the further loss of life. As I told the hon. Member on 9 March, we do not at present see any direct role for ourselves or the European Ten to play. However, we certainly remain ready to support any effort that has a realistic hope of bringing an early and negotiated end to the conflict.

Mr. McWilliam: Is the right hon. Gentleman aware that civilians are being killed and that vast areas are being polluted because of the dispute? Does he not think that he and his European allies could have done more than they have bothered to do to bring this disastrous conflict to an early close?

Mr. Hurd: We want to bring the conflict to an end. In addition to what the hon. Gentleman said, I have seen today reports of a serious statement by the International Committee of the Red Cross yesterday about the treatment of prisoners held by both sides. If confirmed, that is serious. I entirely agree that if we could see a way in which, realistically, we could be of help in bringing this conflict to an end, we would take it.

Mr. Newens: Does the right hon. Gentleman agree that, in view of the poor record of human rights both in Iran and Iraq and the tremendous suffering of the people there as a result, there is no justification for supplying arms to either side in this struggle? The right hon. Gentleman has already said that no lethal weapons will be supplied. Will he make it clear that we shall not supply any components for lethal weapons? Will he also approach some of our allies to try to persuade them not to supply arms to this area of conflict?

Mr. Hurd: I have told the hon. Gentleman in the past that we have not supplied lethal equipment to either side. That remains the position today. The suggestion in the second part of the hon. Gentleman's question would not lead us far.

Mr. George Robertson: I agree with the Minister's reference to the reports in today's press about the Red Cross statement. Does the right hon. Gentleman agree that it is almost unprecedented for an organisation such as the Red Cross to make a direct accusation against both sides in a conflict? Will he make sure that the Government press as hard as possible on both sides to act in accordance with the Geneva convention and that the Red Cross is backed up in all the work that it is doing?

Mr. Hurd: I am grateful to the hon. Gentleman. We urge both sides of the conflict to honour their clear obligation under the Geneva convention about the treatment of prisoners of war.

United States of America

Mr. Canavan: asked the Secretary of State for Foreign and Commonwealth Affairs what subjects he expects to discuss at his next meeting with representatives of the Government of the United States of America.

Mr. Pym: I shall have an opportunity to meet members of the American Administration on a number of occasions in the next few months. The topics to be discussed will naturally depend on the forum and the circumstances at the time, but I expect that they will include East-West relations, arms control, the middle east, the world economy and matters affecting our bilateral trade.

Mr. Canavan: If the Secretary of State gets the chance to meet representatives of the United States Government before he is sacked by the British people on 9 June, will he tell President Reagan that an increasing number of people in Britain and elsewhere are utterly opposed to the intervention of the United States Government in the affairs of Central American independent states, especially to the continuing supply of arms to the Government of El Salvador and the CIA-inspired plot to invade and destabilise Nicaragua?

Mr. Pym: The hon. Gentleman speaks for himself. I have discussed the subject with the Secretary of State. The Government support the United States Government's objectives in Central America.

Mr. Ward: Early in the next Parliament, when my right hon. Friend will have the opportunity to meet United States representatives on behalf of the British Government, will he suggest that one of the best contributions that the United States can make to peace in the middle east is to stop the supply of all arms to Israel until it stops colonising the West Bank?

Mr. Pym: My hon. Friend's latter point is a matter for the United States and its relationship with Israel. I have made clear to the United States the British Government's view on this difficult and drawn-out dispute. We are extremely pleased that Secretary of State Shultz achieved agreement a few days ago. We must hope that, in the near future, that will develop into the withdrawal that was there negotiated. As for the rest, I remain anxious about the way in which negotiations are going in the middle east, but when there is progress such as we saw a few days ago, we are thankful. We must build on it to achieve a better outcome in the future.

Mr. Anderson: Having dithered over the date of the general election, why is the Prime Minister now dithering about attendance at Williamsburg? Is she prepared to be the only head of a Western Government who will not be at Williamsburg? If she refuses to go, is the Secretary of State aware that the Opposition are ready to substitute for her?

Mr. Pym: That is a subject that I have not discussed with the Secretary of State. In view of her decision about the general election, my right hon. Friend the Prime Minister will come to a conclusion about Williamsburg in the fairly near future.

Mr. Wilkinson: Will my right hon. Friend confirm that, although the Government welcome the concept of parity in warheads in the INF negotiations, which has been broadly welcomed by the United States Administration, he

will make it clear to the United States Administration yet again that he, on behalf of the British Government, like the French Government, does not regard British strategic nuclear forces as negotiable.

Mr. Pym: I agree with my hon. Friend's latter point. Although I have explained several times in public and, I think, in the House that in certain circumstances we would be prepared to consider that matter again, we are not so prepared in present circumstances. On my hon. Friend's first point, the Kremlin's decision to talk in terms of warhead numbers is a move for which NATO has been arguing for a long time. To that extent I welcome that statement, but there are other elements in it that are quite unacceptable.

Mr. Deakins: In view of that answer, will the Foreign Secretary make it clear to the American Administration that we are prepared, if necessary, to avoid a hold-up in the INF negotiations in Geneva and START, to offer our strategic weapons as part of the balance that must be considered in those multilateral disarmament negotiations?

Mr. Pym: No, Sir, and there is no hold-up in either of those important disarmament talks. Indeed, the most far-reaching suggestions have come from the Alliance in both the INF negotiations and START. If progress is made there and there are clear signs that, far from a sustained build-up of nuclear and conventional military equipment in the Soviet Union, they pursue a policy of genuine reduction of arms on both sides, especially between the two super powers, the British Government would be prepared to reconsider their stance. However, it is clear from the rigid and sustained no that we get from Moscow in both talks that we are some way away for that.

Nicaragua

Mr. Tom Clarke: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about current British relations with Nicaragua.

Mr. Pym: We have full diplomatic relations with Nicaragua and are keeping under review the possibility of reopening our permanent representation there. Meanwhile, frequent visits are made to Nicaragua by the ambassador and other members of our embassy in Costa Rica who are accredited to the Nicaraguan Government. The substance of our relations with Nicaragua would be improved by greater evidence from the Nicaraguan side of respect for democratic freedoms and the need to promote peace and stability in the region.

Mr. Clarke: Is the Secretary of State aware that British anxiety about American involvement in Nicaragua extends to worries about what is happening to British citizens in that country? Will he tell us how many British citizens are involved, what advice has been given to them and who our representatives on these matters are?

Mr. Pym: The visits to which I have referred provide a way in which we can keep in touch with the Nicaraguan Government on these matters. I cannot give the hon. Gentleman specific figures today, but we constantly represent our anxieties about the mistreatment of minorities and religious groups in that country. We strongly hope for a move towards greater democracy.

Mr. Whitney: Does my right hon. Friend agree that the attention that Opposition parties direct towards other


Central American states with regard to democratic freedoms and human rights could equally well be directed towards Nicaragua? Does he agree that no elections have been held there, that no promise of elections is being fulfilled, that the rights of the press are being extinguished, that the rights of the Meskito Indians are being suppressed and that human rights in Nicaragua leave a great deal to be desired, whereas the elections in El Salvador have been completely ignored by the Opposition?

Mr. Canavan: And hundreds of people are being killed every week.

Mr. Pym: I agree with my hon. Friend's assessment. We support the objectives that President Reagan is pursuing. They are in support of democracy, reform, human freedom, attention to human rights, continued help for economic development and other matters.

Mr. Clinton Davis: Would it not be helpful if the Foreign Secretary were to go to Nicaragua, as I have done, to see what is happening for himself rather than rely on tittle tattle from his hon. Friend the Member for Wycombe (Mr. Whitney) and the American Government? If the Foreign Secretary shares President Reagan's objectives, does he also share his view that the counter-revolutionaries who are operating from Honduras against Nicaragua, who are armed and financed by the United States, trained in the United States and consist essentially of ex-Somosan guardsmen, are to be considered as freedom fighters?

Mr. Pym: The activities on the borders of Honduras with Nicaragua and El Salvador are ones that the Central American region would be far better without. That is clear. We know that there is a struggle in Nicaragua and that that country is governed by a regime which leaves a great deal to be desired.

Cyprus

Mr. Dubs: asked the Secretary of State for Foreign and Commonwealth Affairs whether any further progress has been made towards a successful outcome to the intercommunal talks in Cyprus.

Mr. Hurd: The intercommunal talks went into recess on 14 April. There are no developments to report since my answer to the hon. Member for Wood Green (Mr. Race) on 13 April.

Mr Dubs: As the intercommunal talks have now been dragging on for years without any obvious signs of progress, does the Minister agree that, if there is to be an end to the troubles of that divided island, there must be a new initiative, which ought to come from the British Government as they are one of the guarantor powers of the Republic of Cyprus.

Mr. Hurd: The General Assembly of the United Nations has begun to discuss Cyprus again. We hope that that debate, and any words or actions by anyone, will help the United Nations intercommunal talks, because they, rather than separate initiatives, offer the best hope.

Mr. Jim Spicer: Does my right hon. Friend agree that a large share of the blame for the partition of the island and for the Turkish intervention lies with the complete failure of the British Government at that time to live up to their responsibilities as a guarantor power? Should we not take

more positive action, either individually or through the European Community, because it is clear that nothing will happen through the United Nations?

Mr. Hurd: We have considered that possibility from time to time. It is not sensible to try to apportion the blame for the past. We are anxious to have practical progress and we are clear that although Mr. Gobbi and the secretary-general of the United Nations have not achieved results, they have made some progress. That is the best hope for the future.

Mr. Thomas Cox: Is the Minister aware of the recent attempts of the Turkish Administration to stop the lawfully-elected Greek Cypriot delegate attending the Council of Europe meeting? Will he watch closely the efforts of the junta in Ankara to stop people attending the Council of Europe in Strasbourg, outline clearly the position in Cyprus and tell the Council of Europe who is causing the delay in any meaningful progress in the intercommunal talks?

Mr. Hurd: I was in Strasbourg that day and I heard several accounts of what happened. This is clearly a matter for the Council of Europe and its assembly. During that meeting in Strasbourg the Greek and Turkish Foreign Ministers talked together, which is a hopeful sign.

Mr. George Robertson: The visit next week by the President of Cyprus would have provided an opportunity for a fresh initiative, or at least for some progress in the intercommunal talks. Since that visit has become a casualty of this panic run to the ballot box, however, what steps will be taken during the next four weeks to make progress with the talks?

Mr. Hurd: I have already answered that question. We are sorry that we must postpone President Kyprianou's visit and we hope that he will come here as soon as possible.

Mr. Graham: Will the Minister constantly bear in mind that the many thousands of Greek Cypriots who live in my constituency will continue to resent deeply the fact that they were deprived of their homes and their land by the Turkish invaders? Will the Minister assure the House that it will remain a constant high priority of the Government to bring pressure to bear wherever they can to reach a speedy and just settlement?

Mr. Hurd: That is a fair statement. One must choose one's instruments and the process that offers the best chance of success, and not dodge from one method to another.

ASEAN (Discussions)

Mr. Adley: asked the Secretary of State for Foreign and Commonwealth Affairs when next he intends to meet his ASEAN counterparts; and what they expect to discuss.

Mr. Pym: I met my ASEAN counterparts at the fourth European Community and ASEAN Foreign Ministers' meeting in Bangkok at the end of March. No date for the next meeting has yet been set. Meanwhile, we maintain contact through diplomatic channels and I would expect to meet a number of my ASEAN colleagues individually during the year. Discussions normally cover a wide range of subjects, including the circumstances in Cambodia.

Mr. Adley: Does my right hon. Friend accept that the five members of ASEAN regard their membership of that


organisation as importantly as we regard our membership of the European Community? In view of what he said about Kampuchea and the United Nations resolution sponsored by ASEAN, which almost the entire world, with the exception of the Soviet Union and its Vietnamese clients, supports, what further steps will he take to support the re-establishment in Cambodia of a Cambodian Government led by Prince Sihanouk?

Mr. Pym: I agree with my hon. Friend that ASEAN is an important and effective organisation. It is also a defence organisation in a way that the European Community is not. It was a successful meeting and it was useful for both regional groups to meet. I am constantly exploring with our allies and friends the best way to restore to Cambodia the life and circumstances that we would all wish.

Mr. Newens: How does the right hon. Gentleman's profession of support for democracy and respect for human rights accord with his support for representatives of the Khymer Rouge, which had an appalling record of genocide in Cambodia, remaining in the United Nations organisation? Will the right hon. Gentleman undertake to discuss with ASEAN the appalling nature of that regime and the fact that no organisation should support the Khymer Rouge in future?

Mr. Pym: The countries of ASEAN have an extremely difficult problem with the Vietnamese forces in Cambodia. We had a long discussion about the matter, and ASEAN believes that the coalition that now exists will help that country to make progress. It is correct, as the hon. Gentleman says, that the Khmer Rouge is part of that coalition, but all the members of ASEAN, which are the countries most immediately affected by the crisis, believed that to be a helpful move. We supported it for that reason.

Sir Charles Fletcher-Cooke: Does my right hon. Friend know that the Foreign Secretary of Thailand, whose Government have recently been returned triumphantly at the polls, now feels strong enough to consider visiting Hanoi to make direct contact with Vietnam and to discuss Kampuchea? If his mission is supported in general by ASEAN, as he believes it will be, will my right hon. Friend give the support of the Government and, if possible of Europe, to that initiative?

Mr. Pym: My hon. and learned Friend has raised an important point. There is the possibility of such a development, and we are considering it with our allies. At first sight it would appear to be a helpful move, and I know that the Thai Foreign Minister is considering it carefully.

Mr. James Lamond: If the Foreign Secretary is searching for ways to achieve a solution in Kampuchea, would he not do better to consider the resolutions passed at the recent non-aligned conference in New Delhi, which were at least welcomed by the Foreign Ministers of the three countries in Indo-China at the conference of 12 April, who did not reject them, as they did the resolution that was mentioned earlier?

Mr. Pym: As is often the case with such resolutions, even if they are taken by the non-aligned movement—which consists of some members that could scarcely be called non-aligned—they do not on the whole produce solutions to problems that are as difficult as those of Cambodia.

Soviet Union (Religious and Cultural Freedom)

Mr. Sainsbury: asked the Secretary of State for Foreign and Commonwealth Affairs whether the question of religious and cultural freedom in the Union of Soviet Socialist Republics was discussed during the recent visit of the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) to Moscow.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): During my recent talks in Moscow I reiterated our concern at the Soviet human rights performance and raised several individual cases.

Mr. Sainsbury: I am sure that the House is grateful for that. Does my hon. Friend agree that the continuing repression of religious and cultural freedom, especially of the Christian and Jewish communities, in the Soviet Union is a major obstacle to any chance of improving relations between the Soviet Union and Great Britain? Is not the failure of the Soviet Union to fulfil the human rights aspects of the Helsinki agreement cause for concern about its ability or intention to adhere to the rest of that agreement?

Mr. Rifkind: My hon. Friend is correct. The Soviet human rights record has deteriorated sharply in recent months. Only this afternoon I was visited by the sister of a Soviet dissident, Mr. Yevdokimov, who has been sentenced to eight years' imprisonment and internal exile for activities which in a normal country would not be considered illegal or unacceptable. It is an unfortunate example of disrespect for human rights.

Mr. Anderson: Is the Minister aware that we welcome the fact that he has taken up those matters in the Soviet Union? Does he agree that the Soveiet Union does itself no good by its continued repression of Christians, Jews and other dissidents? Does he also agree that if our representations are to be more effective we should be seen in the world to be even-handed in criticising violations of human rights in Central America and Chile and other countries, and not just in countries behind the Iron Curtain?

Mr. Rifkind: I am grateful for the hon. Gentleman's support for the representations being made about human rights violation in the Soviet Union. The Government, like previous Governments, are concerned with human rights violations wherever they occur.

Sir Anthony Kershaw: Was my hon. Friend able to explain to the Russians that the excuse that Communism can admit no deviation without itself falling apart is not sufficient for the Western world to be able to devote any credence to their signature on any treaty?

Mr. Rifkind: My hon. Friend's question is an indication of the basic insecurity that is felt by Soviet leaders, who are well aware of the unacceptability of their system to the vast majority of those who have the misfortune to live under it.

Mr. Beaumont-Dark: Bearing in mind Russia's well known tyranny over its own people, does my hon. Friend not think it strange that the Opposition should continue to ask us to trust it by pressing for one-sided nuclear disarmament?

Mr. Rifkind: It is extraordinary that the Opposition should have announced their intention unilaterally to disarm and then to have written to the Soviet Union to ask how it would respond to such a policy.

Consular Services (Overseas Deaths)

Mr. Cryer: asked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied that sufficient help and advice is available from the consular service to United Kingdom citizens when their relatives die abroad.

Mr. Rifkind: Yes, Sir. Our consuls abroad provide whatever practical help and advice they can to relatives and friends of the deceased—for example, by putting them in touch with the police and local authorities. They will also provide a list of local lawyers, names of suitable interpreters, and give advice about local burial, cremation, or repatriation of the remains. It is, however, for the local police to investigate any suspicious circumstances concerning the death.

Mr. Cryer: Has the Foreign and Commonwealth Office not read the "Helen Smith Story"? Does the Minister not realise that Ron Smith became concerned because of the obstruction of officials of the Foreign and Commonwealth Office? Should it not be the task of the Foreign and Commonwealth Office to investigate deaths of United Kingdom Citizens abroad rather than leave the task to the persistence and determination of parents, as happened in the Helen Smith case?

Mr. Rifkind: Mr. Smith received a great deal of advice and help from consular staff in Saudi Arabia, who accompanied him on visits to the police and provided interpretation, transport and accommodation at the embassy. The hon. Gentleman should be aware that local investigations of a crime must be the responsibility of the police of the country concerned, and that any assistance given by other countries can be provided only with the agreement and co-operation of the country primarily concerned.

Mr. Ogden: As there are reports that the Federal Government of Germany have re-established their consular service in Windhoek, Namibia, and as we have British premises in that city and country, is it not time that the Secretary of State for Foreign and Commonwealth Affairs was asked to reconsider his decision not to appoint British representatives, so that we may be better informed and so that British interests can be better protected?

Mr. Rifkind: Our ability to establish and maintain consular offices in various parts of the world demands a series of considerations to be undertaken. These include resource considerations and other wider matters.

Disarmament Negotiations

Mr. Frank Allaun: asked the Secretary of State for Foreign and Commonwealth Affairs what response the Government will make in the disarmament negotiations to the Soviet statement that the Union of Soviet Socialist Republics will not use nuclear weapons against states which will not themselves make or harbour them.

Mr. Pym: A Soviet statement to this effect was first made in 1978. It clearly implied a nuclear threat to the Alliance. The United Kingdom itself gave an assurance in the same year that we would not use nuclear weapons

against non-nuclear weapon states which were parties to the non-proliferation treaty or a similar international agreement except if they attacked us, our forces, our dependent territories or our allies in association or alliance with a nuclear weapon state. It would be welcome if the Soviet Union would give a similar assurance in the current discussions on this issue in the committee on disarmament.

Mr. Allaun: Will the right hon. Gentleman ask NATO to make a reciprocal offer to eastern European countries and thus create a European non-nuclear zone?

Mr. Pym: I remind the hon. Gentleman of the clear declaration that was made by NATO, and reaffirmed as recently as last summer, that the Alliance would not use any weapons, nuclear or conventional, unless attacked. That is the most forthcoming statement of its kind that has been made. I think that I have explained the response that we gave to the issue raised in the hon. Gentleman's main question.

Mr. Churchill: Would it not be the height of naivety to entrust the security and lives of the British people, not to the NATO Alliance and the independent deterrent, which has provided us with 38 years of peace with freedom, but instead to the good will and sense of honour of the men who from time to time may hold sway in the Kremlin, as the Labour party now proposes to do by its determination to end our independent deterrent and to cripple the ability of the United States to defend Western Europe by getting rid of nuclear bases in this country?

Mr. Pym: I am sure that my hon. Friend is right.

Mr. Campbell-Savours: Why should the reaction of the Soviet Union and the Soviet people to the deployment of cruise missiles in Western Europe be any different from the reaction of the American people and the American Government to the possible deployment of nuclear missiles in states in Central America?

Mr. Pym: I have often said that if we could reach the Soviet people in one way or another I feel certain that they would take the same view as the rest of us about nuclear weapons and disarmament generally. Unfortunately, they are not in a position to receive any messages except by permission of the Kremlin. That is one of the great weaknesses of the present situation. If we could get through democratically to the Soviet people, I am certain that we would have arms redactions.

Mr. Ward: Does my right hon. Friend agree that the fact that Afghanistan does not harbour nuclear weapons has done nothing to stop the systematic slaughter by conventional weapons in which the Soviet Union has been engaged for years?

Mr. Pym: However horrendous and unacceptable nuclear weapons are, and they are, they have come into existence and they have not caused any deaths since the second world war. On the other hand, conventional weapons have caused millions of casualties, among them the casualties in Afghanistan. As everyone knows, that brutal invasion was entirely unjustified. To keep the Afghans in their place, 105,000 Soviet troops are required to be present in Afghanistan. It is a disgraceful episode in history.

Mr. Clinton Davis: Does the right hon. Gentleman recognise that the Government's stance might be a little more persuasive if the Prime Minister did not so constantly


resort to the stagnant language of the cold war? If the Government do not believe that our nuclear arms system should be counted within the INF talks, what objection is there to Britain making a contribution instead to START in respect of our own system?

Mr. Pym: The hon. Gentleman knows that our deterrent is considered by us and the Russians to be a strategic weapon. It is, however, only a minute part of the nuclear armoury of the super powers. It is the minimum force that can exist and be a credible and effective deterrent. Therefore, it cannot form part of START. As I said earlier today, and as I have said on other occasions, if there is a drastic change in the strategic situation and a willingness on the Russian side to reduce armaments, nuclear and conventional, which is put into effect, we would be prepared to consider our position.

Middle East

Mr. Cyril D. Townsend: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the middle east.

Mr. Pym: Mr. Shultz's success in securing an agreement in principle between Israel and Lebanon is very welcome progress. I hope that the other parties concerned will also now agree to an early withdrawal of their forces from Lebanon.
I remain acutely concerned at the lack of progress towards a wider Arab-Israeli peace settlement. President Reagan's proposals still offer the most realistic starting point for negotiations, but a major effort will be needed from all concerned if the present highly dangerous stalemate is to be broken.

Mr. Townsend: I am grateful to my right hon. Friend. Is he aware that, so long after the signing of the Camp David accord, there are still about 28 Egyptian civilians being held as prisoners of war in Israel? Will he keep a close eye on the fate of civilians and military personnel in Israeli hands in the Ansar camp, and generally in South Lebanon and Israel, try to ameliorate their conditions, and press for instant release?

Mr. Pym: My purpose is to endeavour to do whatever I can in that direction.

Mr. Russell Johnston: Will the right hon. Gentleman and his colleagues answer properly the question put by the hon. Member for Harlow (Mr. Newens) about the supplying of component parts to the participants in the Iran-Iraq war? Does the rather opaque reply mean that we are supplying component parts? What is the difference between supplying lethal weapons and supplying component parts to enable the weapons to be used?

Mr. Pym: No illegal equipment is being sold to Iran.

Sir Hugh Fraser: I welcome my right hon. Friend's regard for the new agreement between America, Israel and the Lebanon, but is it not time that the House and the Foreign Office gave more praise to Israel for having settled a difficult problem and turned to the main obstruction to peace, which is the Syrian Government?

Mr. Pym: A substantial advance has been achieved, as I have said, and it is excellent that Lebanon and Israel have agreed to the new arrangement. We now want to see that

the arrangement is put into practice and carried out as soon as it possibly can be, because that is the best way to establish a free and independent Lebanon.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall allow a minute extra at the end of questions on the EC so as to allow in the Opposition Front Bench on this question.

Mr. Clinton Davis: What direct representations has the Foreign Secretary made, or does he contemplate making, to the Syrian Government in view of their implacable hostility to the concept of withdrawing simultaneously with the Israelis?

Mr. Pym: I met the Syrian Foreign Minister in March, when he was here with the Arab League delegation, and I have been in touch with him since. He knows our views, and the hon. Gentleman and House will know that the Syrians are taking a hard line on this issue. However, it is our hope, as it is of the Secretary of State of the United States, that we shall secure an agreement with Syria so that the withdrawal that everybody wants can begin to take place.

Oral Answers to Questions — EUROPEAN COMMUNITY

Community Finances

Mr. Joan Evans: asked the Secretary of State for Foreign and Commonwealth Affairs when he expects progress on the budget of the European Community.

Mr. Knox: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about progress towards reaching agreement on European Community finances.

Mr. Pym: The Commission last week published its proposals for the long-term reform of the Community's financing system. Foreign Ministers will discuss these proposals, and the solution of the immediate budgetary problem facing Britain, at their informal meeting on 14 and 15 May and at the Foreign Affairs Council on 24 May in accordance with the remit given by the European Council in March.

Mr. Evans: Does the Secretary of State agree that as we are going into the general election and as the future budget contributions are to be discussed at Stuttgart on 6 and 7 June, there will be no agreement on a permanent solution? Will he confirm that our net contribution to the budget since we joined has cost us £6 billion and that we have been contributing £1 million for every day since we have been in the Market?

Mr. Pym: Nobody thinks that there will be anything like an agreement on a long-term solution by the time of the Stuttgart meeting on 6 and 7 June. Everybody in the Community recognises that it will take a number of months to settle that. Progress has already been made, but the debate has only just begun and everybody recognises that it will take some time. For that reason, it is necessary to have separate arrangements for the United Kingdom budget in 1983. Discussions on that will begin informally at the weekend meeting to which I referred and will carry on in the Foreign Affairs Council on 24 May.

Mr. Knox: Does my right hon. Friend agree that a commitment to join the exchange rate mechanism of the


EMS could be helpful in enabling us to resolve our budgetary difficulties, quite apart from its other advantages?

Mr. Pym: That is debatable. A number of my hon. Friends and others believe that that would be helpful, but Her Majesty's Government have come to the conclusion that so far, at any rate, it would not be to our advantage to join.

Mr. Maclennan: Is the Foreign Secretary aware that the Government's failure to secure a settlement of the agriculture budget is costing British farmers dearly with every passing week and that, in particular, the sheep farmers have already lost £600,000? When does the right hon. Gentleman expect to get the agriculture settlement fixed?

Mr. Pym: When everybody agrees. My right hon. Friend the Minister of Agriculture, Fisheries and Food has been fighting a doughty battle in the interests of Britain and, had it not been for him, I have no doubt that there would have been an even more expensive settlement than the one that we shall get when he finally achieves agreement. I have every confidence that he will achieve agreement.

Mr. Squire: If, for some reason or another, in the next few weeks my right hon. Friend were to be challenged on our budget contribution, would he undertake to make clear, first, the massive distinction between the performance on the budget of the Labour party when in Government and that of this Government, and, secondly and most importantly, that unlike the Labour party, this party has made a purpose of working within Europe to get agreements along the line for this country, and has not run away from its responsibilities?

Mr. Pym: My hon. Friend makes a valid distinction between the two parties and their approach to this difficult problem. Had it not been for my predecessor, the noble Lord Carrington, and the Prime Minister, I do not think that we should have been able to negotiate a refund of over £2,000 million in the lifetime of this Parliament. That is a much better position than would otherwise have existed and is certainly much better than that which we inherited from our predecessors.

Mr. Heffer: Does the right hon. Gentleman recall that on every occasion that my right hon. and hon. Friends attempted to get a better deal they were attacked by the then Opposition Front Bench? We were accused by the Tory party of being too abrasive and undermining Britain's position in the Common Market. The difference between the two Governments is that on any occasion on which this Government have tried to make some progress they have received the full support of the Opposition. Is the right hon. Gentleman aware that the Prime Minister said that she would get an agreement by June? Is it not clear that there will not be an agreement by June, and is it not a good idea for the right hon. Lady not to bother to go to Stuttgart but to wait until after the election, when we shall have won and can begin the process of getting out of the Community?

Mr. Pym: In the last Parliament when the Conservatives were in Opposition, we used to accuse the then Government, and the hon. Gentleman who was part of it, of getting nowhere when they went to Europe. They did not get anywhere. The hon. Gentleman talked of

abrasiveness, but we have achieved an extremely helpful refund. As for the statement about the time of the Stuttgart Council, I can only remind the hon. Gentleman of the decision of the European Council in March at Brussels, which was that the European Council in Stuttgart in June would receive a report from the Foreign Affairs Council about progress made towards achieving a settlement.

Summit Meeting

Mr. Renton: asked the Secretary of State for Foreign and Commonwealth Affairs what main issues he expects to discuss at the European Community summit meeting in June.

Mr. Teddy Taylor: asked the Secretary of State for Foreign and Commonwealth Affairs if he is submitting proposals to the Commission of the European Communities on the issues which are to be discussed at the meeting of the Council of Ministers early in June.

Mr. Haselhurst: asked the Secretary of State for Foreign and Commonwealth Affairs what subjects he expects to be raised at the next meeting of Community Heads of Government.

Mr. Pym: We expect Heads of Government to review economic and social developments in the Community as well as international economic and political developments, and to discuss the subjects set out in the conclusions of their March meeting, namely, the long-term financing of the Community and the solution of the United Kingdom budget problem for 1983 and later; the enlargement negotiations; youth unemployment; energy, research and development policy; completion of the internal market; and environmental questions. We have been in regular contact with the Commission on all these matters.

Mr. Renton: I thank my right hon. Friend for that detailed reply. Can he count on maximum support from Chancellor Kohl and other European leaders at the Stuttgart summit for himself and the Prime Minister? Is it not clear that if the Labour party were to win the election two days after that summit and if, Heaven forfend, the Member for Liverpool, Walton (Mr. Heffer) were to find himself in my right hon. Friend's shoes, this would lead to Britain's withdrawal from the Community, the break-up of the Ten and Britain becoming the most despised country in Europe?

Mr. Pym: Nobody knows how the Labour party—if it ever gets the chance, and I am doubtful that it will—would carry out its undertaking to withdraw this country from the Community. It would not find it very easy. Nor do we know how it would cope with the consequential loss of jobs and all the other resulting problems. My hon. Friend requires a good deal of imagination to think of the events of which he spoke.

Mr. Taylor: As the Common Market may be discussed during the election campaign, will my right hon. Friend make it clear that the net contribution for 1983 of about £1,200 million would be absolutely intolerable to the British Government and that we intend to get a fixed rebate agreed from 6 June?

Mr. Pym: It remains to be seen whether we achieve an agreement on 6 June. Naturally, Britain wishes to reach an agreement, as do our partners. We trust that it will


happen. The Government are confident that a settlement will be reached that will be satisfactory to the House and to the British public.

Mr. Jim Callaghan: If, in the discussions on these issues at the EC summit at Stuttgart on 6 and 7 June, there is no agreement on the cash rebate level to be paid to Britain from the massive sums that we have put in, will the Prime Minister risk a legal and constitutional confrontation with the EC by unilaterally withholding Britain's budget contributions, or will she continue to thump the table?

Mr. Pym: We are confident that we shall achieve an agreement with our partners that will make that unnecessary. That is what we are working towards.

Mr. Nicholas Winterton: Will my right hon. Friend confirm that on 6 June Britain will receive a rebate from the EC in excess of £500 million, which will bring the amount brought back to this country by the Government to £2·5 billion? Does he agree that the enlargement of the EC to include Portugal, and ultimately Spain, will place great strain on the finances of the EC and that that may cause further problems for Britain unless a proper budget arrangement is reached in the very near future?

Mr. Pym: On the first point, the payment that results from the agreement that is reached will come some time later. The payment would not be immediate. That has been the position for 1980, 1981, 1982 and will certainly be the case for 1983. My hon. Friend is correct on his second point. He stated one of the factors that inspired the Community to look for a fundamental change in the financing system and to go for a long-term solution that will iron out the problems. Spain and Portugal's applications to join the Common Market are incentives for examining such a fundamental issue, as they will have to be accommodated one way or another. It is clear to everybody that a revised, financial system will be necessary.

Mr. Foulkes: Does the Secretary of State not think that Britain's position at the summit will be seriously undermined by the failure of the Foreign Affairs Select Committee to produce a report on the future of the Falklands because of the deliberately obstructive tactics of certain Conservative hon. Members? Further, what part did the Foreign and Commonwealth Office have in inspiring such an obstructive tactic?

Mr. Pym: Those questions are not relevant to the topic under debate.

Portugal (Community Funds)

Mr. Russell Johnston: asked the Secretary of State for Foreign and Commonwealth Affairs what approximate proportion of the regional and social funds of the European Community he expects will be allocated to Portugal after her entry into the Community.

Mr. Hurd: It has been agreed in the accession negotiations that Portugal should join in the European regional development fund from accession, but the Community has yet to consider the question of its quota. It is not yet possible to provide even an approximate indication of what that will be. It is also difficult to make any estimate about the Portuguese share in the social fund.

Mr. Johnston: Bearing in mind the great poverty in Portugal, is it not correct that, unless the budget is extended, nothing meaningful will be achieved through the regional and social fund to help the Portuguese? If the Government succeed in getting the financing aspect correct, why would they oppose the budget being subsequently increased?

Mr. Hurd: None of the proposals that have been put forward provide an effective method of stemming the flow of resources into the agricultural sector, which the Government consider to be too great. Until that basic problem is courageously tackled the Government consider that the approach is bound to be defective.

Mr. Marlow: Does my right hon. Friend agree that, whatever the effects of the entry of Portugal on the regional and social fund, a simple and important question must be answered, namely, that however much that would cost, we in this country will never agree to an increase in the 1 per cent. VAT?

Mr. Hurd: The Government do not believe that a case has been made out for an increase in the 1 per cent. VAT. The Government are still studying the Commission's proposals, which contain some new and interesting ideas. My right hon. Friend will propose a modulated VAT that rests to some extent on agriculture, and which the Government would see as a measure that took the place of part of the present VAT position.

European Parliament

Mr. Dykes: asked the Secretary of State for Foreign and Commonwealth Affairs if he plans to meet his counterparts in the Community to discuss future powers for the European Parliament.

Mr. Hurd: No. The role of the European Parliament is covered by the Genscher-Colombo proposals which my right hon. Friend next expects to discuss with his Community colleagues at an informal meeting on 14 and 15 May. The declaration would not involve any change in the powers of the Parliament as laid down in the treaties.

Mr. Dykes: Can my right hon. Friend speculate—although it is not his direct responsibility — why the Labour party is so terrified and scared of the European Parliament and its future development? Does my right hon. Friend agree that, if the European Parliament is encouraged and built up, rather than denigrated, that will help it to work with Britain for the greater good of all, including the Community? The House should have the confidence and courage to give Members of the European Parliament greater official access to this place. That would be of great help.

Mr. Hurd: The last matter is not for me. The Government are in favour of encouraging the European Parliament and its Members to succeed in the job with the powers with which they are entrusted.

Mr. Deakins: Will the Minister confirm that for any extra powers to be given to the European assembly a change is required in the treaties, in accordance with the appropriate procedures set out in them?

Mr. Hurd: Yes, Sir.

Sir Dudley Smith: Is my right hon. Friend aware that the position might be improved if the MEPs of both main parties concentrated on their activities in Strasbourg rather than on seeking seats at Westminster?

Mr. Hurd: That is a matter for those individuals and for those who select and elect candidates.

Mr. Ioan Evans: As we have already handed over our trade and agricultural policies and much of our industrial policy to the Common Market commissioners, does the Minister agree that if the massive unemployment in this country is to be solved Britain must consider abandoning the Treaty of Rome and withdrawing from the EC?

Mr. Hurd: It would be a strange way to tackle unemployment by putting at risk the enormous number of jobs that depend upon our access to the Community.

Mr. Ogden: Will the Minister confirm that the essential purpose put forward by the founders of the European Community, and of our continuing membership of the European Community, is so to knit the peoples, the commonwealth of countries of Europe, together that never again will a world war start in Europe?

Mr. Hurd: The hon. Gentleman is right. The Government will have an opportunity in the next few weeks to remind the public of that truth.

Sir John Biggs-Davison: Is my right hon. Friend aware that he will have widespread support for what he has just said about the European assembly restricting itself to its functions under the treaty? Would it not destroy itself, or at least its reputation, if it tried to do too much and discuss everything under the sun?

Mr. Hurd: I have much sympathy with that remark. The European Parliament has functions and it has shown that it can exercise useful influence within those functions. If it tries to range too wide, it will undermine its reputation.

Mr. Spearing: Will the Minister confirm that, even if a rebate on Britain's budget contribution is offered at Stuttgart, that sum will be subject to the approval of the European assembly?

Mr. Hurd: All of these arrangements have to go through the normal procedures of the Community's institutions.

United Kingdom (Membership Anniversary)

Mrs. Renée Short: asked the Secretary of State for Foreign and Commonwealth Affairs what consultation with Her Majesty's Government took place before the publication by the London office of the European Commission of the document "Why have a party" on the occasion of the 10th anniversary of the United Kingdom's membership of the European Community.

Mr. Hurd: None. As the Lord President of the Council told my hon. Friend the Member for Southend, East (Mr.

Taylor) on 28 March 1983, the European Parliament and the Commission are responsible for their own information programmes and are not required to consult member states about them.

Mrs. Renée Short: Assuming that the Minister saw such a shoddy piece of propaganda, does he not think that the paucity of information that it contains about the alleged benefits that Britain is supposed to have received during the past 10 years of membership illustrates the poverty of the benefit that we have received?

Mr. Hurd: I have seen the publication. It contains many pretty pictures. I am not responsible for its editorial content. The Government have circulated their own material in recent months on this subject. If the hon. Lady studies that material, I am sure she will agree that it is balanced and constructive.

Mr. Teddy Taylor: Does it not worry my right hon. Friend that so much taxpayers' money—several million pounds—is being spent on putting forward debatable arguments on an important political issue? Might there not be a case for getting the European assembly, the Commission and Governments together to try to reach some sensible arrangement, such as we have in Britain, whereby taxpayers' money is used only to put forward the facts, not political opinions?

Mr. Hurd: The Commission and the Parliament have their budgets, which are examined in advance. However, once they are approved it is for those institutions to decide how the money is used.

Mr. Ginsburg: In connection with this publication, will the Minister reconfirm that Europe is now Britain's largest trading partner? Will he stress that withdrawal from the EC would constitute an economic disaster for this country?

Mr. Hurd: Of course that is right, and with the help of many people in several parties we shall be able to ram that point home.

Mr. Cryer: Are not the Government backing such shoddy documents as "Why have a party" by failing to tell the truth about the Common Market, which is that it has cost us more than £6 billion—the majority of which has been paid during this Government's period of office? Is it not also the case that our membership has led to the loss of hundreds of thousands of jobs in this country, and that we shall regenerate the economy only by gaining control over our economy, which we cannot do while we are still in the Common Market?

Mr. Hurd: We take every opportunity to point out the truth, without exaggeration, which is that we are now beginning to make a success of British membership of the Community and that employment and investment prospects, quite apart from our political influence in the world, would suffer irreparable damage if we were to put that process into reverse.

Bristol, East (Poll of Voters)

Mr. Tony Benn: On a point of order, Mr. Speaker. I rise on a point of order of which I gave you previous notice, and do so on behalf of a constituent of mine. She was telephoned last night by a representative of an organisation called Audience Selection, which announced that it was polling 2,000 people in the new Bristol, East constituency. Eight questions were put, five of them referring to me. None of them referred to other candidates. The poll had been commissioned by a consortium of newspapers. Today, I telephoned the company and it confirmed that a poll of that character was being undertaken. I also caused inquiries to be made indirectly of the same company to obtain an estimate of the cost of polling 2,000 people by telephone from London. The estimate given was £6,000.
The issue raises matters of concern to the whole House, which has retained its control over election law and corrupt practices. I shall not weary the House with quotations from "Erskine May", but pages 32 and 33 make it clear that the House transferred the problem of adjudication over corrupt practices to an election court but that the judge would make a report to the House for action under the privileges of the House. The issues that I wish briefly to put before you, Mr. Speaker, are as follows. First, is it proper for telephone canvassing to be undertaken with no limit on expenditure? Secondly, is it proper that costs, in this case twice as great as the legal limits for any candidate—I estimate that the legal limits for Bristol, East are £2,775 for myself and other candidates—should be undertaken? Thirdly, can political canvassing be undertaken in the

guise of polling? Fourthly, are newspapers exempt from election law if they call it polling? Fifthly, and most fundamentally, does this constitute a corrupt practice?
The House has been very precise and clear in protecting the democratic process by laying down in law, in the Representation of the People Act, what the legal limits of expenditure should be. If it is the case—as is, I believe, now clear—that the newspapers that commissioned the poll, and Audience Selection, the company undertaking it, are bypassing the rules that the House has imposed, issues of corruption may arise. I accept, Mr. Speaker, that you have not had time to consider the matter in detail, but I felt that it was important to put it to you. Perhaps you could advise me at some stage as to your ruling.

Mr. Speaker: I am much obliged to the right hon. Gentleman. The House would not expect me to rule now on the issues that he has raised. I doubt very much whether I shall have any standing in the matter, but I shall write to the right hon. Gentleman in the time left to us, before I myself depart.

BILL PRESENTED

ELECTION OF A HOUSE OF PARLIAMENT

Mr. Michael English presented a Bill to provide for the democratic election by proportional representation on a list system of one House of Parliament; for the re-naming of that House (at present commonly know as the House of Lords) as the Senate; and for other connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 155.]

Proportional Representation

Mr. David Alton: Given the events earlier this week and the lack of time for legislation to proceed, I do not wish to move my motion for leave to introduce the Proportional Representation Bill. It would be better settled at the hustings in a few days' time.

Mr. Speaker: Not moved.

Mr. Michael Cocks: On a point of order, Mr. Speaker. Were you given any notice that the Bill would not be moved? It has precluded another hon. Member from taking that slot and he might well have wished to test the mood of the House on proportional representation. Since that will be a substantial issue in the next election, it might have been for the benefit of the community as a whole. Will you give us your guidance on that point?

Mr. Michael English: Further to that point of order, Mr. Speaker. I gave notice that I would wish to oppose the hon. Member for Liverpool, Edge Hill (Mr. Alton) and I mentioned that to him. He was courteous enough to tell me what he intended to do today. However, is it not an abuse of the procedures of the House to book time and to withdraw the Bill only when it is too late for other hon. Members to book the same slot?

Mr. Bob Cryer: It sounds like an abuse.

Mr. English: The hon. Member for Edge Hill must deal with his own party, but if he no longer supports the single transferable vote procedure he should say so to his party and not in public. The thing that perhaps cuts me to the quick—[HON. MEMBERS: "Ah."]—is that the hon. Gentleman has deprived me of my swansong, when it was just possible that I might have defeated him, with the votes of both parties.

Mr. Nicholas Winterton: Further to that point of order, Mr. Speaker. I come from a part of the country which is very similar to that represented by the hon. Member for Liverpool, Edge Hill (Mr. Alton), and where his party was recently humbled in the local elections. Is it not therefore most unfortunate that the hon.

Gentleman, who represents a party that apparently considers this issue so important, is not prepared at this critical point in the Parliament to put the matter to a vote? I am confident that right hon. and hon. Members would show the Liberal party and the hon. Gentleman that we are very strongly opposed to proportional representation. It is most unfortunate that he did not have the courage to press his Bill today—

Mr. Speaker: Order. I think that I have had enough now—[Laughter.] I am much obliged to the right hon. Member for Bristol, South (Mr. Cocks) and to the other hon. Members who raised points of order. It is in order for an hon. Gentleman not to move his ten-minute Bill if that is his wish. It has happened before in my time and I am always grateful if a ten-minute Bill … Well, perhaps I had better not say it.

WAYS AND MEANS

INCOME TAX (CHARGE OF HIGHER RATES FOR 1983–84)

Resolved,
That income tax for the year 1983–84 shall be charged—

(a) in respect of so much of an individual's total income as exceeds £12,800 at such higher rates as are specified in the Table below; and
(b) in respect of so much of the investment income included in an individual's total income as exceeds £6,250 at the additional rate of 15 per cent.

Part of excess over £12,800
Higher rate per cent.


The first £2,300
40


The next £4,000
45


The next £6,200
50


The next £6,200
55


The remainder
60

—1 [Mr. Britian.]

RELIEF FOR INTEREST (LIMIT FOR 1983–84)

Resolved,
That the limit imposed by paragraph 5 of schedule 1 to the Finance Act 1974 shall, subject to any reduction to be made under that paragraph, be £25,000 for the year 1983–84—[Mr. Brittan.]

Orders of the Day — Finance Bill

(Except Clauses 12, 16, 63, 73 and 88 and Schedule 11, and any New Clauses first appearing on the Order Paper not later than 19th April and relating to the national insurance surcharge or the rate of value added tax.)

Considered in Committee.

[Mr. BERNARD WEATHERILL in the Chair]

Clauses 1 to 9 ordered to stand part of the Bill.

Clauses 10 and 11 disagreed to.

Clauses 13 and 14 ordered to stand part of the Bill.

Clause 15

CORPORATION TAX: SMALL COMPANIES

The Chief Secretary to the Treasury (Mr. Leon Brittan): I beg to move amendment No. 51, in page 9, line 4, leave out 'two-hundredths' and insert 'seventy-fifths'.

The Chairman of Ways and Means (Mr. Bernard Weatherill): With this it will be convenient to take Government amendment No. 52.

Mr. Brittan: Amendment No. 51 changes from seven two-hundredths to seven seventy-fifths the fraction for determining marginal relief for small companies. Amendment No. 52 deletes subsections (2) and (3) of clause 15 so as to leave the profits limits for the purposes of small companies' relief at the level fixed by the Finance Act 1982 — £90,000 and £225,000 instead of the £100,000 and £500,000 as originally proposed in subsections (2) and (3) of the clause.
The amendments are needed because the Opposition would not agree to the increases we proposed in the Finance Bill in the profits limits for the purposes of relief for small companies. With the need to dispatch the Finance Bill as quickly as possible, and without the consent of the Opposition, it has not been possible to proceed with the proposal in its original form. Accordingly, amendment No. 51 fixes a new fraction for the purposes of calculating marginal relief.
Amendment No. 52 drops the proposal to increase the profits limits for the relief to £100,000 and £500,000. As a result, last year's profits limits of £90,000 and £250,000 remain in force. This means that companies with profits between £90,000 and £500,000 will be paying more tax as a result of the Opposition's intransigence than under our original Finance Bill proposal. Because the profits limits have not been increased, the marginal rate on profits between £90,000 and £225,000 will go up from 60 per cent. to 61⅓ per cent. rather than go down to 55° per cent. under our proposals. In other words, what the Opposition require is a substantial disincentive to companies contemplating expansion.
Accordingly, I can now say that when the present Government are re-elected it is our intention to restore as soon as possible the increased profits limits of £100,000 and £500,000 which we proposed in the Finance Bill. This will help small and medium-sized companies with profits

all the way up to £500,000. They will understand, and the country will know, who has sought to deny them that relief and who will be restoring it.
The reduction in the rate of tax for small companies from 40 per cent. to 38 per cent. is of course unaffected by the amendments, as the Opposition have not objected to that, but as a result of the Opposition's attitude it will for the time being apply only to companies with profits up to £90,000 and not up to £100,000.

Mr. Robert Sheldon: Amendment No. 51 is the first of the new amendments that have been tabled in manuscript form and we are grateful to you, Mr. Weatherill, for accepting them.
I maintain and the Committee should maintain that this is not the best way to proceed with the Committee stage of the Finance Bill. The normal way to proceed, and the way in which we would expect to proceed, would be in Committee Room 10 where the proper scrutiny of these meausures, line by line and clause by clause, would have been possible. The worst way to proceed would have been Government by decree, which was the alternative proposed. The second way to proceed would have been Government by acceptance. The best way of all, and the way in which we would normally carry out these procedures, would have been Government by examination, argument and debate. It is an arrogant assumption that the Government are almost entitled to get their measures through just because they proposed them. What we must take into account is that we have had to endure four Budgets which have damaged our industrial and commercial life. We were not able by any means to propose our alternative but we felt able in some way to limit some of the damage of the Bill. That is the basis on which we proposed the amendments that we are debating today.
We accept the lower rate of 38 per cent. corporation tax for smaller companies. That was never in dispute and we welcomed and agreed with it. We thought that it would provide a small but valuable impetus to the role and activities of the small firm, but we saw no reason why this advantage, which in normal circumstances we might even have been willing to see increased, should be extended to companies with profits of £500,000 a year. If there is to be a direction of resources or a reduction of taxation it should be genuinely directed to the smaller companies, particularly in the formation and in the initial activities of the undertaking.
The small change that we propose in clause 15 will be an improvement. I note that it is the Chief Secretary's intention, if he is lucky enough to be returned to office, which I think unlikely, to bring about changes in July. We will be introducing, we hope, an autumn Budget in which we will attempt to remedy many of the wrongs carried out by the Government and bring about an even greater improvement in the matters under debate in clause 15.
We will have an enjoyable, active and busy time correcting the errors made over a long period.

Amendment agreed to.

Amendment made: No. 52, in page 9, leave out lines 5 to 16.—[Mr. Brittan]

Clause 15, as amended, ordered to stand part of the Bill.

Clause 17

WIDOW'S BEREAVEMENT ALLOWANCE

Question proposed, That the clause stand part of the Bill.

Mr. Brittan: It might be for the convenience of the House if I say a word about clause 17, which relates to the widow's bereavement allowance. The clause extends the tax allowance introduced in section 23 of the Finance Act 1980 for widows in the year in which the husband died to the year following the year of death, provided that the widow has not remarried before the beginning of that year. It will apply to widows whose husbands died before 5 April 1982.
The amount of allowance for the year after the husband's death will be the same as for the actual year of death— that is, it will be the same as the additional personal allowance for single parents, and will thus equal the difference between single and married allowances.
The widow's bereavement allowance was introduced by the Government in 1980 to assist widows through the difficult years of adaptation following their husband's death. It was originally intended that the widows should be entitled to one twelfth of the allowance for each month or part of the month between the death of the husband and the end of the tax year. In Committee, it became clear that most interested parties preferred a flat relief on the grounds of simplicity.
Many widows bereaved towards the end of the tax year do not have sufficient income of their own in the remainder of the year to benefit from the allowance. Ministers have therefore decided to extend the allowance to the year after the year of bereavement. That will mean that more than 100,000 widows will be helped, whereas only 45,000 received any benefit previously.
This is, therefore, a real assistance to a section of the community for whom there is considerable sympathy. I was pleased to hear of the response of Mrs. June Hemer of the National Association of Widows, who described the Government's proposals as really good news for widows. I therefore urge the Committee to support clause 17.

Mr. Robert Sheldon: The Opposition wholly agree with the Government on clause 17. It is one part of the Bill that we welcome and we give it every encouragement and support.

Question put and agreed to.

Clause 17 ordered to stand part of the Bill.

Clause 18

RELIEF FOR INTEREST

The Chairman: I have selected the manuscript amendments in the name of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon).

Mr. Robert Sheldon: I beg to move, as a manuscript amendment, in page 10, line 1, leave out from the beginning to 'in'.

The Chairman: With this we will discuss the other manuscript amendment, in page 10, line 4, leave out from 'land)' to end of line 45 and insert:—
'the references to £25,000 shall have effect for the year 1983–84.
(2) Nothing in this section requires any change to be made in the amounts deductible or repayable under section 204 of the Taxes Act (pay as you earn) before 31st August 1983.

(3) Notwithstanding anything in the preceding provisions of this section, the amounts deductible or repayable under section 204 of the Taxes Act on and after 11th May 1983 and before 31st August 1983 may be such as would be requisite to give effect to the provisions as to relief for interest contained in a Resolution passed by the House of Commons on 21st March 1983.'

Mr. Sheldon: If the Committee thinks that I am responsible for every word of the manuscript amendments, I must admit that I had the assistance of a parliamentary draftsman.
The amendments deal with mortgage relief. Under the whole of the life of this Government, and that of the previous Government, the ceiling for mortgage relief stood at £25,000, and the Opposition believe that it should be retained at that figure rather than increased to £30,000. In Committee on 20 May 1982, the Chief Secretary said:
The average advance to first-time buyers is now £14,500 and to other borrowers about £15,500".
Therefore, first-time buyers have an average advance lower than that for other borrowers, which does not surprise us. The Chief Secretary continued:
so the limit of £25,000 on the size of loan qualifying for relief is still high enough not to affect the vast majority of house builders."—[Official Report, Standing Committee A, 20 May 1982; c. 289.]
Those remarks were closely in line with what had been said on many previous occasions by the Chief Secretary or his predecessor. He pointed out that every Government had refused to change the limit year after year under similar arguments, and that the problems of the building industry would not be ameliorated by any increase in the limit. We must ask ourselves why, having refused a change year after year, suddenly the Government are converted to an increase in the limit.
We know that there have been divisions between the Treasury and No. 10, because the leaking capacities of the Government are great indeed. Information is relayed to every reader of any reputable newspaper. That fits in with the position as we know and understand it. After all the years of acquiescence, the biggest new argument was not the conversion to the principle of an increase, but the fact that this year would be general election year. That was the biggest argument of all, and much more important than the number or prices of houses. The Government thought that certain advantages could be obtained by introducing the measure.
The Opposition believe that mortgage relief should be given to those with modest mortgages. We want to do our best to help people to buy their homes. We are in favour of mortgage relief and of giving assistance to those wishing to buy their homes. We are especially in favour of younger people getting a start on the home-owning ladder. But besides that, we also want the opportunity for proper examination and debate.
The Chief Secretary has said that he is prepared to reintroduce the Government's proposals—if they were to be so incredibly fortunate, by some misguided decision of the electorate —to be in a position to reintroduce them. That commitment surprises me, but I shall let that pass for now. I fail to understand the urgency of the matter if all that is required is another Finance Bill if the Government are re-elected.
I stand by the commitment that I gave earlier—that the Opposition urgently wish to consider these and other matters in the context of an autumn Finance Bill that would


examine all the changes introduced by the Government and put them on a proper basis for examination and debate by the House.

Mr. R. A. McCrindle: I wonder whether the right hon. Gentleman can give me a message to take to my suburban constituency, where there are a substantial number of properties costing far more than £30,000, and where it is estimated that 15 to 20 per cent. of the first-time buyers have to borrow more than £25,000?

4 pm

Mr. Sheldon: I would advise the hon. Gentleman's constituents to vote for the return of a Labour Government, who would reduce taxation on those whom the hon. Gentleman at present—though perhaps not for long—has the privilege to represent. Let us not forget that only 5 per cent. of the population have benefited from the changes in taxation introduced by the Conservative Government, while 95 per cent. have suffered as a result of them. The hon. Gentleman will discover that most of the constituents to whom he refers are among that 95 per cent.
Like the other amendments that we have been instrumental in introducing, this will be of some advantage to the Revenue. It will be possible to redirect the moneys being given under these measures in more sensible and useful directions, to help those who could derive most benefit from them.

Mr. Brittan: The Committee will be familiar with the circumstances in which the amendment has been brought in, and the reasons why I reluctantly have to advise my right hon. and hon. Friends not to oppose it. I do so simply and solely in order to get the Finance Bill through. I cannot help suspecting, however, that the right hon. Gentleman is already regretting the fact that he has insisted upon this petty, mean-minded and ineffective amendment as part of the package of arrangements for bringing debate on the Finance Bill to a conclusion.
The right hon. Gentleman talks about the Opposition's commitment to mortgage interest relief, and about the necessity to consider all these matters. However, if he had his way—I shall explain why he will not really have his way — he would make it impossible to achieve this limited extension of mortgage interest relief.
The right hon. Gentleman sought to associate me in some way with his observations by quoting what I have said in previous debates. However, he failed to quote my words last year when I made it absolutely clear that it was not the Government's policy
for ever and a day to keep the level of £25,000 in all circumstances."—[Official Report, Standing Committee A; 20 May 1982, c. 289.]
This year we were able to put forward the proposal that the Opposition are now attempting to torpedo.

Mr. Jack Straw: rose—

Mr. Brittan: No, I shall not give way at the moment.
The amendment is designed to maintain the limit on mortgage interest relief for 1983–84 at £25,000 — the level at which it has beeen set since 1974. That is the price that the country is now being asked to pay. However, the change can have no practical effect before August,

because the Budget proposal is embedded in current Revenue practice. No one, therefore, will lose before August as a result of this mean-minded amendment.

Mr. Straw: rose—

Mr. Brittan: If the hon. Member will contain himself, I shall give way in due course.
It is the Government's intention, upon re-election, to introduce a further Finance Bill which will set the limit for 1983–84 at £30,000 as proposed in my right hon. and learned Friend's Budget. Therefore, when a Conservative Government are returned no one will suffer from the mean-mindedness of the Opposition. The amendment will merely serve to make plain the nature of the Opposition's intentions and prejudices. It will do no one any harm. As a result of the Finance Bill that we shall propose immediately on our return, people will benefit from the increase.

Mr. Straw: If this matter is of such importance to the Government, can the Chief Secretary explain why —according to reports that were never denied by the Government — the Treasury opposed every suggestion that the limit should be increased, and was forced to increase it only by the intervention of No. 10? Secondly, why did the Government make no move whatsoever to increase the limit in any of their previous Budgets?

Mr. Brittan: If the hon. Gentleman seriously expects me to comment on press reports about disagreements between Government Departments, he is less experienced than I had thought. On his second point, the Government's position has always been clear and has been expressed on numerous occasions. In previous years there may not have been the opportunity to make such a change, but it was always our policy that at an appropriate moment the matter should be reconsidered.
Nothing that any Opposition Member has said justifies the Opposition's refusal to agree to this beneficial change. About 150,000 people would be the losers if the Opposition were able to give permanent effect to the limit that they seek to impose. A basic rate taxpayer paying interest of 10 per cent. on a £30,000 mortgage would be worse off by £3 a week if the amendment had any practical effect. However, the adverse effects would be much worse. Of first-time buyers in London with new building society mortgages, about a quarter have mortgages of over £25,000. They need a mortgage of over £25,000 if they are to take the crucial first step on the housing ladder. Any suggestion from the Opposition that they wish to help first-time buyers is arrant hypocrisy, when a quarter of first-time buyers in the London area need a mortgage above the previous limit. If the Opposition had their way, many of those people would not be able to buy houses.

Mr. Joel Barnett: Can the hon. Gentleman tell the House what salary one would need to obtain a mortgage of £30,000?

Mr. Brittan: It would vary enormously, according to circumstances. There is no answer to such a question.
Many of the builders who warmly welcomed the increase proposed by the Government would not be able to sell houses to those first-time buyers. The Opposition are seeking — vainly, hopelessly and pointlessly — to deliver a blow to the construction industry. [Interruption.] Hon. Gentlemen opposite are right to laugh, as their proposal is totally ineffective. However, if the


Opposition's amendment were to have a lasting effect, many people in the sale and purchase chain would not be able to move. In housing, a sale at the upper end affects transactions further down the chain.
All this arises because the Government proposed quite a small increase of £5,000 to the limit of £25,000 which was first imposed in 1974. If that figure was right then, it is hard to see why the Opposition oppose this increase in 1983.

Mr. Straw: Why did the Government wait four years?

Mr. Brittan: In so far as that sedentary intervention represents any kind of argument, it is inconsistent with Labour Members' opposition to the measure and it is arrant hypocrisy. If the Opposition had any sincerity, they would put down an amendment not to reduce but to increase the £30,000. If the previous limit had increased in line with prices, the figure for 1983–84 would be more than £80,000. The Government are trying to help the first-time buyer, the housing market and the building industry.
Once again, in the few actions that they can take in the dying days of this Parliament, the Opposition have shown that, whatever lip service they pay to the concept, in practice they oppose home ownership and they oppose any moderate measure to assist in that direction. Mercifully, their action will be to no avail. It will have no immediate effect because the changes announced in the Budget are already embedded in the system and by the time the Opposition's mean-minded amendment would have taken effect it will have been removed by a new Finance Bill.

Mr. John Ward: Opposition to home ownership is part of the Labour party creed and it would have been more honest for Labour Members to admit that. If the petty little group representing the Labour party in the Committee today had the rest of their colleagues behind them, they might have had the courage to admit that they are against home ownership. In opposing an increase in the mortgage interest relief limit, they have shown once again that no effort will be spared to get everyone under their control, in their housing and working under their system, because for the Labour party there can be no other.
If in the past four years relief has been less than it would have been under a Labour Government, that is because the Conservatives have brought inflation under control. It is a dire warning to any council house tenant hoping to buy the home in which he lives that in the remote event of a Labour Government of any shade or group the chance of obtaining mortgage relief and buying that home will also be extremely remote. We should perhaps be grateful that on the eve of a general election the Labour party has given this message to all home owners and would-be home owners—council tenants, young couples saving for their first home or people wishing to move into a retirement home — that in no circumstances should they do anything to bring back a Labour Government either through a direct vote for the Labour party or by voting for the strange collection of SDP Members who appear below the Gangway from time to time and who effectively would let in a Labour Government.
The almost panic-stricken proposals from the Opposition have perhaps been made because the Opposition are frightened to admit that there are signs of positive recovery in the construction industry, and especially in the house building industry, as a result of four years of resolute Conservative Government. The

Opposition seem desperate to stifle that recovery by any means at their disposal. My right hon. and learned Friend the Chief Secretary described them as petty and mean-minded. I add the further charge of vindictiveness towards those who dare to wish to own their homes and to expect some relief or assistance for first-time buyers.
Whatever illusions Labour Members may have, the Government's measure is designed to help the first-time buyer and to help the construction industry to provide more first homes. The Opposition's action will be seen by those people as a direct attack. We may take consolation from the fact, however, that there is not the remotest possibility of the Opposition's behaviour in the past 48 hours having any effect because some of them will not even return to the Opposition Benches and representatives of a party which attacks home ownership will be confined for ever to those Benches.
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I hope that the message will go out clearly that we have stayed here today to support those who wish to stand on their own feet and, in the right circumstances, to own their own homes. I encourage anyone saving to buy a first home to rest assured that he will continue to receive support from this Government and from the next Government, who will comprise the same group of people.

Mr. David Winnick: There is no sillier accusation than to say that we on these Benches are against home ownership. We favour people having the opportunity to buy their own houses. They should have equal opportunity—[Interruption.] If the Parliamentary Private Secretary, the hon. Member for Beaconsfield (Mr. Smith), wishes to intervene, I am sure that he knows the correct procedure. We favour people having the opportunity of home ownership and also the opportunity to rent accommodation.
Tory Members should remember that it was a Labour Government who introduced the option mortgage scheme, giving many people who could not otherwise have obtained a mortgage the opportunity to become owner-occupiers. It is absurd to accuse a party that made changes in the law to help people on more limited incomes to become owner-occupiers of being against owner-occupation. It is a dirty slur to suggest that we are against people having the opportunity to buy their homes. We are not and have never been against that.
The hon. Member for Poole (Mr. Ward) suggested that the construction industry was recovering. In fact, it has been devastated. It has suffered more in the past four years of Conservative Government than in any other peacetime period. One has only to compare the state of the industry in the 1930s with its state in the past four years to realise that it has been devastated, largely by the policies pursued by the Government and supported by the hon. Gentleman.
The Parliamentary Labour Party has received numerous representations from what is known as the group of eight in the construction industry describing the adverse effects of the Government's actions and urging changes in policy. We have described the policy that we intend to pursue in Government, and we have suggested that if any of the group's members helped to put the Conservatives into office they should try to persuade the Government to change their policies.
The figures show that in the past few years fewer council dwellings have been started even than in the 1930s. When so many people are in desperate housing


need throughout the country, how can the Conservatives justify a council house building figure on more or less the same scale as in the 1920s? Conservative Members have talked about the difficulties faced by people on incomes sufficient to take up a mortgage of £30,000 or more. How do they justify the rent increases for council tenants? In the four years since the Government came to office rents have risen nationally by about 117 per cent. That is more than twice the increase in the retail price index in the same period. Therefore, if we are to have sympathy for those who have been hard hit we should be concerned about council tenants who have been penalised by the Government for no reason other than that they are council tenants. In those circumstances, I find it hypocritical for arguments to be advanced that people are being hard hit because the limit for tax relief on the mortgage interest rate will not be raised to £30,000.
The aim of Government policy on owner-occupation and council tenants should be to give assistance to those in genuine housing need. Many people are unable in any circumstances to get a mortgage. Their income will not allow them to do so, particularly at a time of mass unemployment. First priority should be given to families who cannot be rehoused by a local authority and who have to live in inadequate accommodation. Some of our constituents have to bring their children up in one or two furnished rooms. First priority should not be given to those referred to by the Chief Secretary.
We must have a different housing policy. Assistance should be given to the people I have described. It will be the purpose of the Labour Government who take office after 9 June to give genuine assistance to those with limited incomes who want to buy their homes. That Government will also give assistance to the thousands and thousands who are desperate for rented accommodation; such people go day after day to the local council office but are told that there is no hope of their being housed or rehoused. Those are the people about whom we should be concerned and who should be given the utmost priority. Therefore, I offer no apology for the action that my Front Bench has taken and which has been the subject of attack by the Chief Secretary.

Sir Albert Costain: It was interesting to listen to the speech of the hon. Member for Walsall, North (Mr. Winnick). This is probably the last opportunity I shall have of speaking in the Chamber. The hon. Gentleman has always shown envy when he has spoken. He excelled himself in the speech he has just made. I have never listened to a speech which has shown more clearly how stupid the Opposition are.
The hon. Gentleman talked about council houses. I do not see how they relate to mortgages unless they are bought, and he has been one of those who have opposed the sale of council houses. During my time as a Member of Parliament I have often thought how nice it would be if we could get a Finance Bill through without having to sit through the long hours of the night. If the Government have to drop some of their proposals, it is a very high price to pay for getting a Finance Bill through quickly.

Mr. Ted Graham: The hon. Gentleman has taken my hon. Friend to task for introducing in the debate the subject of council house rents. Surely the hon. Gentleman must acknowledge that the Treasury Front

Bench is attempting to deal with a housing problem, part of which involves the owner-occupation nexus and part the rented sector. My hon. Friends see that one element is getting an advantage while another sector, the rented sector in council housing, is being disadvantaged. Surely the hon. Gentleman believes in equity. Therefore, it is not unreasonable to introduce the rented sector element into the argument.

Sir Albert Costain: One thing that I bear in mind is that those who own their own homes pay rates and it is out of those rates that council houses are subsidised. I hope the hon. Gentleman will give me the credit of knowing a little about council house building and about the building industry. Before council houses were put up for sale, some people bought their own homes to get out of council houses.
The first council house scheme was in Bootle in 1919. At that time there was a fear that people would not move into council houses. They were built originally as homes for heroes under the Lloyd George regime. It was feared that people would think it infra dig to live in them because they were regarded as alms houses. The hon. Member for Walsall, North may look surprised, but he was not born then. Now it is a privilege to be a council house tenant because of the subsidised rents.
You may rule me out of order, Mr. Weatherill, for getting away from the subject under debate. I am disappointed that my Government did not propose to raise the mortgage limit to £35,000. Had the Finance Bill taken its normal course and been considered night after night and day after day, I might have put down an amendment to increase the limit to £35,000.

Mr. Winnick: The hon. Gentleman has been critical of some of my remarks. Obviously he puts the Tory point of view. Unlike some of his hon. Friends, he has great experience in the building industry. Does he not agree that the building and construction industry has suffered badly in the last four years? That is why the group of eight, with which he is familiar, has been so critical of various aspects of the Government's housing and construction policy. The hon. Gentleman has said that he would like to see the limit for tax relief on mortgage interest raised to £35,000. How does he justify the increase in council rents, by which quite a few of his constituents have been adversely affected, which is more than double the increase in the same period in the retail price index?

Sir Albert Costain: I do not know which of the hon. Gentleman's questions you will allow me to reply to, Mr. Weatherill; I should like to take most of the afternoon on them because they give food for thought.
One reason why council rents have gone up has been the high cost of maintenance. Another is that wages in the building industry have gone up in even greater proportion to council rents. The hon. Gentleman also ought to bear in mind that most people who buy their homes do their own maintenance. This is why it has been advantageous to occupy council houses. The hon. Gentleman referred to the group of eight. The hon. Gentleman and I were present at meetings kindly organised by the paper Building. The group of eight has done much for the building industry. The hon. Gentleman has not put correctly the reasons for the criticism. He has the wonderful advantage of


remembering only the points that suit him. There is a Socialist filter. Socialist Members remember only the little points that suit their argument, and forget the rest.
The hon. Gentleman said that the building industry had had a rough time. I do not deny that. Whenever there is a slump and a recession the building industry is the first to be hit. It is always the building industry that starts a recovery. The amendment will spoil any such prospect. Once confidence is built up people want to build factories, invest and expand. That is why the building industry heads a recovery.
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The amendment is not quite the tragedy that it might appear because my right hon. and learned Friend the Chief Secretary has already explained that the proposed increase could not have applied until August. Therefore, little damage will be done before a new Finance Bill is introduced. I hope that message will go out clearly to those who are buying houses. I shall watch the proceedings of that new Bill from the Gallery, either upstairs or downstairs—in Heaven or the other place.
People must have some encouragement to buy their homes. The Labour party talks about encouraging employment and criticises the Conservative party for causing unemployment. But the one industry that can create employment is the building industry because it is employment intensive, and this is the Labour party's first move to stop its expansion.

Mr. Robin F. Cook: I assure the hon. Gentleman that, if he has the evening to spare, we shall be happy to debate the matter throughout the night. The hon. Gentleman says that the Government's proposal is an employment-creating measure. Surely, if he is anxious to maximise employment in the construction industry, he will accept that if the Government have £60 million to spare vastly more employment would be created in the building industry if they put that into public sector investment rather than giving it out in tax relief to a small number of owner-occupiers of whom a few will buy newly constructed dwellings.

Sir Albert Costain: That is the most remarkable comment that I have heard from the hon. Gentleman. I make no secret of the fact that I have always considered the hon. Gentleman to have a high intelligence, particularly in tax matters. Does he not realise that we are talking about a difference of £5,000?

Mr. Straw: We are talking not about £5,000, but about £120 of annual tax relief. Let not the public be misled by Conservative Members making cheap points. The change is worth £120 a year and it raises important points of principle. If £60 million is available to help the construction industry, is it not a simple matter of arithmetic that far more houses would be built, firms helped and construction workers put back to work if that were made available by way of direct orders rather than through this indirect tax concession?

Sir Albert Costain: The answer is perfectly simple. When the £60 million is related to reality we are talking about £120 a house. If we can release £120 in taxation somebody will buy a house that is worth £35,000 and in that way we are creating more employment.

Mr. Bob Cryer: First, does the hon. Gentleman accept that this mortgage relief does not apply

uniquely to new developments? Secondly, does he accept that if £60 million or £70 million is available it might create more jobs if it were spent directly, through local authorities? About 95 per cent. of such house building is carried out by private enterprise.

Sir Albert Costain: The private industry will build council houses, but in the process the public sector is spending the total price of a council house. In the private sector private finance is introduced. There is no mystery about that.
The hon. Gentleman made the point that this measure does not necessarily apply to new construction. I am glad that he did so because it is a point that I had not thought of. He is worried that somebody will obtain a mortgage on a secondhand house. That would be splendid. The chap who sells that secondhand house will generally buy a new one. It is like selling motor cars. If people will not buy secondhand motor cars, new ones cannot be sold. One reason for the present log jam in the house building industry is the fact that secondhand houses are not being sold, so new ones are not being built.
If the amendment were not to be rescinded in August it would be a grave hindrance to the expansion of the building industry. I hope that my right hon. and hon. Friends will point out to the public during the election campaign that they have no need to worry about the mortgage interest that they will receive when they buy a new house because when the Government return to office they will rescind this amendment immediately.

Mr. Graham: Conservative Members have sought to criticise Labour Members over the philosophy behind the amendment. They have attacked our concept of support for home ownership. If they wish to conduct the debate in such extravagant language they deserve to be treated with contempt. In their disappointment and chagrin they are seeking to express their displeasure at the opportunity that Labour Members have to fight one of the battles that has been trailed since the Budget announcement. This is one of the prices of allowing the Finance Bill to make progress. If they wish to turn this into an election issue, which it will be, we shall be happy to fight it on its merits. However, if they wish to persist in smearing Labour Members, they do the quality of debate no service at all. As my hon. Friend the Member for Walsall, North (Mr. Winnick) said, we have a record of positive measures in assisting home ownership.

Mr. Winnick: Not only did we take steps to assist people to become owner-occupiers, but the Leasehold Reform Act 1967 gave far more security and protection to many existing owner-occupiers who otherwise would have found themselves in a difficult position. It was the Conservative party that was so critical of that Act.

Mr. Graham: I am grateful to my hon. Friend because he illustrates a basic truth. Both the Conservative and the Labour parties when in government have always had due regard to advancing the interests of as many people as possible, whether that concerned a desire to rent or a desire to buy. It is the emphasis in the four years of the Government's disastrous record, particularly in the rented sector, that Labour Members wish to see corrected in 1983.

Mr. Cryer: Will my hon. Friend be careful about saying that the Tories are trying to help all sectors in house


ownership? They have deliberately not allowed private tenants of private landlords the same rights to buy and compulsory mortgage facilities that they have imposed upon democratically elected local authorities. They are prepared to sell off the public sector while they protect the private landlord, even though that may be completely opposed to the interests of those tenants who desperately want to buy.

Mr. Graham: I am always grateful to my hon. Friend the Member for Keighley (Mr. Cryer), who rightly reminds me that I should not give the Government too much credit for trying to be even-handed in their housing policies. It is a charade and sham when Conservative Members pretend that they are seeking to protect the interests of owner-occupiers.
As the hon. Member for Folkestone and Hythe (Sir A. Costain) said in his closing remarks, we must consider what the amendment seeks to do. My hon. Friend the Member for Edinburgh, Central (Mr. Cook) pointed out that, with a budget strategy that allows £60 million or £70 million to be spent—although we know that thousands of millions of pounds are involved —the Government have decided to distribute that sum of taxpayers' money by increasing the benefit that is already enjoyed by owner-occupiers. The mortgage interest relief of up to £25,000 is fairly generous and is enjoyed by many hon. Members and millions of people throughout the country. People who are fortunate enough to be buying their own houses and getting mortgage interest relief up to £25,000 should not get the additional benefit of the £60 million or £70 million at this difficult time.
I do not say that people who are buying their own homes are not entitled to as much assistance as they can get. However, I remember the arguments that were put forward by Conservatie Members in the Housing and Building Control Bill and the Local Government, Planning and Land Bill, and in the debates on the Floor of the House on the housing investment programmes. The hon. Member for Folkestone and Hythe has the cheek to say that the Government want to help the construction industry. He speaks with a detailed knowledge of the building industry, but he conveniently forgets, for instance, that this Government are primarily responsible for putting 400,000 construction workers on the dole during the past four years. The Government and the Prime Miniser say that that has nothing to do with them, but we have been down that road before. If the Government take credit for managing the economy and say to the country over the next month that what has happened during the past four years is substantially their creation, they cannot escape the fact that the construction industry needs a boost because it has been decimated and devastated by their actions. One of the major actions taken by this Government as part of their economic policy has been deliberately to seek to damp down expansion, both in the economy and in house building.
Before my hon. Friend the Member for Keighley leaves the Chamber, may I say that he made an effective point when he talked about the proportion of every £100 spent by a local council on house building that goes to the private sector. The figure that I have is that £85 out of every £100 spent on housing in the public sector is actually spent in fuelling the economy of the private sector. Indeed, 85 per

cent. of what the Enfield council spends on housing is used to buy drainpipes, bricks and cement from the private sector. So let us keep the debate at the high level that we expect in this Committee.
If I were invited to spend £50 million, £60 million or £70 million on the country's housing needs, I would say as one who is paying a mortgage—although certainly not £30,000, or even £25,000 — that there are many people in my part of the world, and particularly in this part of the country, who need more than £25,000, but they get the benefit of mortgage interest relief up to that sum. I accept, of course, that they would like more.

Mr. Cook: My hon. Friend said that he would offer the House his advice about how he would spend £60 million, that being the sum involved in the amendment to assist people in housing need. Does he recall that that was the figure necessary to make sure that there were no losers as a result of the introduction of unified housing benefit? This Government, who now beat their chest over this amendment, are the same Government who, only four months ago, told us that they could not find £60 million to ensure that 2 million tenants were not worse off as a result of unified housing benefit, those 2 million being the poorest of all tenants, dependent on supplementary benefit.

Mr. Graham: I am grateful to my hon. Friend who with his knowledge of these matters reveals the sham and hypocrisy of this argument. Were money available, the recipients of higher mortgage interest relief could well be deserving cases, but we must consider the Government's argument against giving a similar amount to 2 million people, including people in desperate need—not those who would like a little more relief, but people who are desperately poor.
When I am asked to say where I think the money should go, I am reminded of the enormous dereliction that has occurred over the past four years as a result of disrepair and lack of attention to houses in both the public and private sectors. If the Government really wanted to improve the quality of life, of which housing forms a basic part, they could easily have done so through the council housing HIP allocations.

Mr. Cryer: Does my hon. Friend agree that people who would like the greater mortgage interest relief would recognise the priorities that the Government are ignoring in other areas of expenditure, as exemplified by the story in The Guardian today about the Secretary of State for Health and Social Security breaking yet another promise to make our blood supplies for haemophiliacs self-sufficient? Those people are in great need and in a very vulnerable position. Self-sufficiency would have guaranteed them some security for the future, but the Secretary of State refuses to help.

The Second Deputy Chairman of Ways and Means (Mr. Paul Dean): Order. I hope that the hon. Gentleman will resist the temptation to stray into that subject.

Mr. Graham: I acknowledge that some people will be angry because they are deprived of benefits as a result of this measure. It is equally relevant to tell the millions of people who will continue to be deprived that, as a result


of the Government's proposals, which they say they will reintroduce when they get the opportunity, they will continue to be deprived.
The Housing and Building Control Bill is part of the Government's housing strategy. Mercifully, by virtue of the Government's ineptness in managing their business and running helter-skelter for a general election, it has been lost. It has been lost through the Government's greed in trying to increase the discounts from 50 per cent. to 60 per cent. and the need for an amendment, which was carried in the other place, and the certainty that Opposition Members would not have tolerated it for a moment.
There the Government's priorities are encapsulated. The Government are hellbent on ridding the state and the community of any assets that the state and the community have, even if it means saying to people, "We want to get out of the business of managing housing, or managing the economy, and we are prepared to offer bribes of 60 per cent. of the value of a house." The Government are prepared to say to the country over the next month, "We want to take from the general taxpayer and give more to those who are enjoying the benefit of mortgage interest relief up to £25,000." We want to say to council tenants who have enjoyed the tenancy of a council home—

Mr. Anthony Beaumont-Dark: I remember that the Socialist party always used to say that people in private rented accommodation had paid for their house five or 10 times over. What is the difference for council tenants? Do not they have the same rights? Why should one want council tenants to be second-class citizens? The only reason why the hon. Gentleman wants that and wants to make them what they are not is that he thinks that they will vote for his party more readily.

Mr. Graham: The hon. Gentleman categorises council tenants as second-class citizens.

Mr. Beaumont-Dark: The hon. Gentleman did.

Mr. Graham: I did not. I never used those words at all.

Mr. Beaumont-Dark: The hon. Gentleman implied that.

Mr. Graham: Opposition Members take careful note that when a council tenant wishes to become an owner-occupier Conservative Members do not point to the newspapers or the billboards and say, "If you want to buy a house, there are millions." The council tenant says, "There is only one house I want, and that is the one that the council owns. That is the one that I want to buy." Thus we denude the housing stock that is needed for most people. Some 7,500 families in my constituency are in council houses. More than 1 million families throughout the country are waiting for the opportunity, not to extend their mortgage from £25,000 to £30,000 but to become a tenant of a flat or a house, for which they would be grateful.
Conservative Members have provided Opposition Members with the opportunity of looking carefully in this short debate at their priorities. They are, "To those that have shall be given more, and to those who have very little nothing more shall be given." Their policy is a sham and a charade. I fully support the attitude of the Opposition Front Bench.

Mr. John Loveridge: The Government's proposal to increase mortgage relief was based on fairness

between one part of the country and the other. We should try to keep the mortgage relief above the threshold of average prices for the kingdom as a whole. House prices are much higher in the south-east than in the north. The Government's proposed measure is now being destroyed by the Labour party—only temporarily, I am glad to say. The Labour party's measure is designed to make a difference so that one part of the country would find it harder than another to get the necessary relief for a first home. There may be a case for helping the north of England. I believe that there is, but there should not be a differentiation in the capacity of first-time buyers to acquire a house, and relief should be above the threshold.
It is interesting that if the relief, which replaced the earlier relief in the early 1970s, had been fully indexed, it would, as I understood from the Chief Secretary, have now reached £80,000. Surely it is right for young people trying to buy homes to have a feeling of stability about what they can obtain from relief in real terms. There should be a permanence and it should be possible for them to know what relief they will get years ahead as they try to save up towards acquiring their first home. If the indexed figure is now so much above even that proposed by the Government, some dissatisfaction is put into the minds of those who have been so saving.
The hon. Member for Edmonton (Mr. Graham) said that basic to the quality of life is good housing. He was right. Basic to the quality of life is the happiness of those who live in houses—the wives and children. I am reminded of a quotation that the House will know:
Age cannot wither her, nor custom stale her infinite variety".
All of us who are happily married feel that about our wives. What a pity it is that the measure proposed by the Opposition should make the wives worried sick because of the change in the indexation, which leaves them with a different expectation from that which they must have had when they began to save. I am glad that the Prime Minister has pledged to restore those cuts when we are re-elected, as I hope we shall be.
I refer to the building industry. Why should we not encourage the building industry with this extra mortgage relief? Jobs would, of course, be created. It as extraordinary that the Labour party never seems keen—here I speak as chairman of the Conservative smaller businesses committee—to help the smaller sector of the building industry. I well remember when 714 certificates were made difficult to obtain for small businesses. That is part and parcel of the Labour party's approach to home ownership. It does not want to encourage either the small business or the house owner.
Home ownership has increased from about 11 per cent. at the turn of the century to about 55 per cent. today. That great increase in home ownership could not have cone about without relief against taxation. The Labour party says, "What about council dwellings? Why are we taking the £60 million out of tax money?" People have earned that money. It is relief against their earnings. In that sense, it is encouraging people to make a bigger effort to earn and to save so that they can put money into a house of their own. Furthermore, if the hon. Member for South Ayrshire (Mr. Foulkes), who has just laughed, were to come to my constituency of Upminster he would see the immense improvements when people have bought their own homes in a housing estate. When one talks to these people in the housing estates one sees how happy they are. They have been enabled by the Government's measures to buy their


own homes. My hon. Friend the Member for Folkestone and Hythe (Sir A. Costain) referred to maintenance. Those people are happy to do their own maintenance and thus to relieve the rate funds of that duty and obligation.
Opposition Members spoke about the history of housing. What party was it that first built 300,000 houses in a year and thus started full reconstruction in the kingdom after the war? In the six years after the war there were delays as a result of the Socialist policy.
Building societies should be encouraged to help home ownership. The higher relief helps to enable building societies to do so. The £60 million does not represent a choice of "gifts". It does not work like that. When people have saved from their money, it is not the same as paying for a subsidy elsewhere out of general taxation.
Opposition Members will know and will have read how in different parts of the kingdom there are substantial numbers of empty houses in many council housing areas. That is where we should look for the immediate relief for those seeking a council house. They need to get off the council housing list and into the houses that are now empty.
I am grateful for the opportunity to take part in this debate on home ownership. The Conservative party believes in home ownership and wants to take every possible step to make it practical for those who want to own their own homes to acquire one. I hope that when we win the general election we shall restore this measure. The Labour party, in proposing to reduce the expected mortgage relief in this Finance Bill, is meanly trying to prevent people from owning their own homes.

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Mr. George Foulkes: I did not think that the opportunity to speak in this debate would arise, bearing in mind the way in which the Prime Minister has cut and run so rapidly to the electorate and the Government's anxiety to get through the business that has been agreed. I am surprised that this debate is taking place.
I am grateful to the hon. Member for Upminster (Mr. Loveridge) for reminding me which constituency he represents. I was about to congratulate him on his maiden speech, not having heard him speak in the four years that I have been here. I gather that in the past week he has suddenly been afflicted with a desire to make as many speeches as possible before he departs the House.

Mr. Loveridge: I appreciate the hon. Gentleman's kindness in referring to me. I regret that he has always been missing on the many occasions during Finance Bill debates and many other debates in which I have spoken. It is a pity that he could not be here to hear me until now. I hope that he has enjoyed the pleasure of hearing me today.

Mr. Foulkes: It is indeed sad that I have not heard the hon. Gentleman before. However, it is a sadness that I am sure I can quickly overcome.

Mr. Cook: I should like to say how welcome it is to hear my hon. Friend's first speech of the evening. In view of his surprise at taking part in the proceedings, I remind him that 80 clauses of the Bill remain to be discussed, as do half a dozen new clauses. The Opposition look forward to scrutinising them with the same vigour as the Government are scrutinising this amendment.

Mr. Foulkes: My hon. Friend the Member for Edinburgh, Central (Mr. Cook) is right. Conservative Members, especially the Parliamentary Private Secretary who has some responsibility in this matter, should not laugh. We do indeed have 80 clauses and many new clauses to consider. If Conservative Members make long, intricate and misleading speeches on this amendment, I can make equally long, intricate and, given the chance, misleading speeches on other clauses.
Like other hon. Members, the hon. Member for Upminster made a misleading speech as this debate is not about home ownership but about mansion ownership. The hon. Member for Upminster mentioned the high price of houses in the south-east of England, but it is different in Scotland. He mentioned the north and south of England but he forgot that there are other countries in this United Kingdom of Great Britain and Northern Ireland. We are dealing with substantial houses and people with substantial means, not ordinary home ownership.
While I was listening to Conservative Members, who are enthusiastic about getting this Parliament over and done with quickly and returning a new Parliament and a new Government, I wondered why they were making such a fuss about the Bill and why the pips are squeaking. The answer is that Conservative Members are having a fit of pique. They should have realised as the Prime Minister and the Chancellor of the Exchequer must have realised and the Chief Secretary to the Treasury, with his great education, will have realised that what has happened was the inevitable implication of the Prime Minister agreeing to cut and run for an election on 9 June.
What has happened is that potential Conservative voters in the south-east of England, who have been counting their chickens and the pound notes that they will save on their big mansions, have read the Financial Times and are suddenly distraught. In clubs or other places where those people mingle with Conservative Members, they have got ratty with Conservative Members and Conservative Members are now thinking, "Oh my goodness, perhaps these people will vote for one of those nice moderate alliance chappies, thus endangering my seat." Therefore, they have decided that they will try to resolve the problem, in spite of the implications of cutting and running being known by the Prime Minister, the Chancellor and the Chief Secretary to the Treasury with his excellent education. If hon. Members want to work out why I keep referring to the Chief Secretary's excellent education they have only to refer to "Dod's Parliamentary Companion". Indeed, they should examine the education of two hon. Members in "Dod".
Conservative Members must have known what would happen when the Prime Minister decided to cut and run. They are now trying to expiate their sins by making great speeches on home ownership as if to say, "Look, you people in Kent, Surrey, Sussex and Hertfordshire, it is not our fault. We really are on your side, forgive us our sins. We may have known all about it but we could not help it.".
Of course, interests other than alleged home ownership or, as I prefer to call it, mansion ownership are represented by the Conservative party. It represents building interests. We have only to examine names of Conservative Members to realise that. Conservative Members also represent building societies. They do not represent just constituencies; they represent vested interests and do so assiduously.

Mr. Brittan: That is out of order.

Mr. Foulkes: Is it? I have not been told so by the Chair, but the Chief Secretary to the Treasury, with his good education, says that I must not say that.

Mr. Straw: As my hon. Friend the Member for South Ayrshire (Mr. Foulkes) and the Chief Secretary to the Treasury share the same education or went to the same school, and as my hon. Friend is three years younger than the Chief Secretary, will my hon. Friend confirm or deny that the Chief Secretary was his prefect?

Mr. Foulkes: No. Two thirds of my education was in Scotland. That counterbalances the one third which did not take place in Scotland.

Mr. Cook: I am grateful for the opportunity to confirm that two thirds of my hon. Friend's education took place in Scotland. Does he agree that it would not be a breach of privilege to suggest that the Chief Secretary had a vested interest in the Bill passing through the House and that, at this stage, it is not obvious that we shall succeed in getting it through by the end of this sitting as the debate is open-ended?

Mr. Foulkes: My hon. Friend has made a good point. I am only at the top left-hand corner of my sheet of notes. My hon. Friend and Conservative Members have much more to say. We could go on for a long time on this amendment, other amendments and the new clauses. I have made a few serious points in a less than serious way but this is a serious point. The Treasury Bench should think seriously about encouraging its right hon. and hon. Friends to make spurious points about the Conservative party's so-called interest in home ownership. They could go on all night and create havoc for the House. Many other hon. Members could come in and discuss this and other matters if that is the way in which Conservative Members want to play it. However, that is not the way in which the Government Front Bench wishes to play it.
My hon. Friend the Member for Edinburgh, Central said that the Government could have provided £60 million to ensure that those who may lose out because of unified housing benefit changes will not do so. The hon. Member for Upminster may say that that is a different matter, because one sum is their money that we shall not take back in tax, and the other is money from tax that we shall spend. However, in the balance of revenue and expenditure it is the same. If we do not take more money in revenue, we have less to spend to help those who will lose out because of the unified housing benefit.
I do not know whether my hon. Friends the Members for Blackburn (Mr. Straw) and Workington (Mr. Campbell-Savours) have had an experience similar to mine, but I have heard that tremendous confusion and uncertainty arises from the unified housing benefit. I regret to say that much of that confusion would have happened anyway, but there is much more confusion because people have become annoyed at losing out and have spoken to their councillors and Members of Parliament about it. The Government chose not to spend £60 million to help them but instead to give additional mortgage relief. House owners already receive substantial mortgage relief in the form of a tax handout for mortgages up to £25,000, but the Government propose to give additional relief to those who are already well off. The choice was between helping those who, by definition, are relatively poor and who need the money or helping the very rich.
The Government have also had to give way on tax cuts, and no doubt Conservative Members—

Mr. Brittan: That is coming later.

Mr. Foulkes: Yes, and no doubt Conservative Members will wish to squeal about it later because the rich have not received the handouts that the Government wished to give to them. If we discuss the matter later, the Chief Secretary will hear Opposition Members attack the proposal.
At the moment I represent South Ayrshire and I hope—

Mr. Brittan: At the moment.

Mr. Foulkes: The Chief Secretary is correct to underline what I said. Until, the House rises on Friday I represent South Ayrshire. After that, with the approval of the electorate, I shall return to the House to represent the new constituency of Carrick, Cumnock and Doon Valley. Do not blame me for the name, Mr. Dean, because I fought through the Boundary Commission hearings, the Secretary of State and the House not to have the name changed. However, I lost that fight.

The Chairman: Order. The hon. Gentleman is going very wide of the amendment that we are discussing. We are not discussing the names of constituencies.

Mr. Foulkes: I do not deny that, Mr. Dean, but South Ayrshire and Carrick, Cumnock and Doon Valley, which are similar, have a high percentage of council houses. I wish to discuss the way in which the outgoing Government — I emphasise the word "outgoing" — have treated council house tenants compared with owner-occupiers. The Labour party has no vendetta against owner-occupiers. I, with many Labour Members, am an owner-occupier and many more owner-occupiers are voting for the Labour party. As my hon. Friend the Member for Walsall, North (Mr. Winnick) said, a Labour Government introduced the greatest scheme to help owner-occupiers —the option mortgage scheme — and several other measures were introduced by successive Labour Governments to assist owner-occupiers.
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The Labour party has nothing against owner-occupiers, but it is anxious to help council house tenants, who for historic reasons tend to be from the lower income brackets. There are exceptions, in that the Labour Members of Parliament who live in council houses are not in the lower income bracket. Instead of restoring the balance and helping council house tenants more than owner-occupiers, the Government have greatly helped house owners, especially mansion owners, during the past four years, while council house tenants have been penalised continuously. Rents, especially in Scotland, have been forced up. It is especially galling that that has happened in Scotland, which at the election returned 44 Labour Members of Parliament out of a total of 71. Specific Scottish legislation has been introduced for which the Government have no mandate. The powers of the Secretary of State for Scotland to force local authorities to increase rents are draconian. My hon. Friend the Member for Walsall, North said that they have increased by 117 per cent. I may be corrected about the exact figure, but they have increased by more than 100 per cent., which is double the increase in the retail price index. Council house tenants have suffered greatly.
Many tenants in my constituency have told me that not only have they been asked to pay more in rents but that the maintenance of local authority houses is diminishing rapidly. That has happened not because of direct action by councils, but because the Government, especially the Secretary of State for Scotland, tell local authorities that their housing support grant will be reduced and that they cannot take money from the rates to subsidise rents. As a result the maintenance of local authority housing has diminished substantially. That is an unwise development.
Conservative Members should be concerned about the maintenance of public property that is paid for out of the public purse, yet the money available for maintenance is being cut dramatically by the Government. For council house tenants the increase in rents and the reduction in maintenance is a direct result of the diktat of the Government and the Secretaries of State for Scotland and the Environment. It is ironic that Conservative Members are parading themselves here today at the fag end of a Parliament to speak on behalf of the mansion owners of the south-east of England—

Mr. David Crouch: We certainly did not come here to listen to the hon. Gentleman. This is the most tedious rubbish that I have ever heard.

Mr. Foulkes: The hon. Gentleman and I agree on many issues. For example, we agree that heavy lorries should not have been allowed into Britain—

Mr. John Hunt: Get on with it.

Mr. Foulkes: As for my speech being tedious and long—

Mr. Crouch: And rubbish.

Mr. Foulkes: Yes, the hon. Gentleman described it as rubbish. My speech has been long and it might be longer. We are in Committee, and if I catch the eye of the Chair I shall be entitled to make another speech. I shall be able to add to my earlier remarks and take up some of the comments of other hon. Members.

Mr. Cook: My hon. Friend's speech comes as a breath of fresh air in the debate and reminds the Committee of the realities of the world outside. Before my hon. Friend moves towards his peroration I hope that he will find time to consider, as one of the arguments that he deploys in favour of the amendment, the clear consequence of the Government's policy. If the Government were successful in increasing mortgage interest relief, the prime effect would be to stimulate higher house prices and not house construction. The higher prices would have to be paid by precisely those whom they claim to be protecting.

Mr. Foulkes: I am grateful to my hon. Friend. He, too, had a good education. He went to an excellent university, which I know only too well. With his usual erudition he has put his finger on the nerve point. In so doing he has made nonsensical the argument of the hon. Member for Upminster.

Mr. Cook: Where is the hon. Gentleman?

Mr. Foulkes: The hon. Member for Upminster said — I wrote down his words so that I would not misrepresent him—that the Government's policy would encourage people to go out and earn more. That would

have serious implications for the Government's incomes policy. Presumably the hon. Gentleman is saying that there should be no restraint on income, especially wages. He has given the game away because we know now that he is talking about mansion owners in the south-east of England.
The hon. Gentleman is saying that stockbrokers, for example, should be encouraged to earn more. It is notable that no Conservative Members suggested that the nurses should be encouraged to earn more when they submitted a legitmate pay claim. Indeed, they were told that they could not have any more, and their claim was rejected by the Government. I shall not develop that argument further, Mr. Dean, as I note that you are looking at me over your Sir Alec Douglas-Home-type spectacles. I admit that I was wrong to go down that track. I am content to have highlighted the nonsense that was talked by the hon. Member for Upminster.
We have heard about the need for a boost for the construction industry. It is an argument that the hon. Member for Upminster saw fit to repeat. If such a boost is needed, it should not be used for the building of private mansions in stockbroker belts in the south-east of England. We should give priority to the building of new hospitals for the NHS and to the improvement of existing ones. We need new local authority schools—

Mr. Nicholas Winterton: Do we need more schools?

Mr. Foulkes: If the hon. Gentleman were allowed to participate in the debate, he would probably argue that the number of children on school rolls is declining and that therefore we do not need more schools. However, it is clear that he was not listening to me very carefully. I said that we need more modern schools. We do not want the old Victorian schools that the Prime Minister and the hon. Gentleman would wish to continue in use for the education of our children. No doubt they want our children to sit behind old-fashioned desks before their teachers, learn by rote and be taught from the blackboard.

Mr. Winterton: That is how I was taught.

Mr. Foulkes: We are talking about the building of modern schools—

The Chairman: Order. The hon. Gentleman is straying a long way from the amendment.

Mr. Foulkes: I apologise, Mr. Dean. As usual, the hon. Member for Macclesfield (Mr. Winterton) caused me to depart from the straight and narrow.
Mr. Winterton: No. I was urging the hon. Gentleman to return to the straight and narrow.

Mr. Foulkes: I was drawn away from the straight and narrow by the hon. Gentleman, Mr. Dean. We want local authority house construction.

Mr. Winterton: Why?

Mr. Foulkes: So that we can transfer tenants from the damp housing which has concerned the Select Committee on Scottish Affairs, which it has considered in great detail.

Mr. Graham: The hon. Member for Macclesfield (Mr. Winterton) queried the wish of my hon. Friend the Member for South Ayrshire (Mr. Foulkes) to see more local authority houses constructed. There are many whose only opportunity of getting a decent home lies in the local


authority sector. They have to look long and hard before finding a house to rent at a reasonable level in the private sector, which means that, realistically, their only chance of finding a house to rent is in the public sector.

Mr. Foulkes: My hon. Friend the Member for Edmonton (Mr. Graham) has answered the hon. Member for Macclesfield more than adequately. My concern lies primarily with those who do not have the income necessary to obtain mortgages of £25,000 or £30,000. These people know that they will never get anywhere near obtaining such mortgages but they, too, need decent housing. They do not want the damp-ridden houses that some of them are forced to occupy. Young families with young children do not want to be forced to live 15, 20 or 30 storeys up in multi-storey blocks.
I think that I have probably said enough, Mr. Dean—

Mr. Nicholas Winterton: I do, too.

Mr. Graham: Keep going.

Mr. Foulkes: I have probably said enough at this stage. However, we are in Committee and if Conservative Members stimulate me to make further comments I shall be able to do so if I am fortunate enough to catch the eye of the Chair.

Mr. Crouch: I decided to participate in the debate to try to ascertain what went on behind the scenes in making arrangements for the Finance Bill. The Labour party has emerged from behind the scenes with a black mark from me. The Opposition Front Bench is occupied by distinguished right hon. and hon. Members when we debate Treasury and financial matters, including the right hon. Member for Stepney and Poplar (Mr. Shore), the Shadow Chancellor of the Exchequer, and the right hon. Member for Ashton-under-Lyne (Mr. Shelton), who opened the debate with temperate moderation. Those right hon. Members are supported by the hon. Member for Blackburn (Mr. Straw) and by the spokesman who always makes valuable contributions on all matters of national economics, the hon. Member for Edinburgh, Central (Mr. Cook). The four members of the Opposition team normally add wisdom to our economic debates though they tinge that wisdom with their own particular philosopy, which divides the House of Commons. I am amazed that on this occasion they have allowed that tincture of Socialism to become a flood of colour. It is that which has destroyed their good judgment.
We are on the verge of an election; we shall soon be facing the 40 million electors on the hustings. Against that background the Opposition have presented themselves as the meanest party in the land. They are trying to deprive our electors of a small concession. The Government's intention was to update a figure for mortgage interest relief that was established on the statute book in 1974. Nine years have passed and Labour Members are still mean and hard-faced about the concession. I cannot understand it.
This debate is not so much about home ownership as about small people approaching a matter to which they must give much thought. Both sides of the Committee have to sort out this problem of the Finance Bill behind the scenes.

Mr. Winnick: rose—

Mr. Crouch: No, I shall not give way. I have listened to the hon. Gentleman and T think that I know his views. I shall be talking not about home ownership but about the way that a party has conducted itself behind the scenes.
5.30 pm
We on the Back Benches are concerned. The hon. Member for South Ayrshire (Mr. Foulkes) is concerned because he is a member of the Labour party and I am concerned because I am a member of the Conservative party and a member who has a view of his own. My view is that I am sorry that my right hon. and learned Friend the Chief Secretary has had to accept this amendment. Many of my hon. Friends have spoken in the way that I am speaking, and I am amazed that we are forced to accept this meanness.
I do not know how the Labour party can go into the election and face the electors and the public and say, "We do not believe in you standing on your own feet. We want complete control of you for as long as possible. We want to control people. We do not want people to buy their own houses. We will stop you, even if there are 150,000 of you. We are determined to keep you on a tight rein. That is the philosophy of our party." I do not believe that that is the philosophy of the right hon. and hon. Gentlemen to whom I have referred on the Opposition Front Bench. There is something moving them from behind their party that causes them to establish these mean and hard-faced policies. It will do them no good. It epitomises the state of their party today. Where there is wisdom it is drowned by the power that runs their party from behind. That power destroys opportunities for people.
Here we have a small measure designed to help people do something for themselves and buy their own houses. It is not designed to help people buy mansions. Threebedroomed cottages in the south-east of England cost more than £25,000 and one can get a 100 per cent. mortgage on that. Go a little bit above a cottage or a terraced house and one might get a semi-detached for £35,000, if one is lucky. This is the reality of house purchase today.
The Conservative party stands for people standing on their own feet. We stand for people owning their own houses and for giving them on opportunity to do so. This was a small measure that helped them still further along the way to owning their own house. The amendment will deny that at the last moment. I am amazed. I am more than amazed: I am disappointed. I am not disappointed in the hon. Member for South Ayrshire, because he is a merry enough character on the Back Benches when he is not talking about the Falklands, but he did not talk much good sense today.
Why did the Opposition not have the guts to join us in this proposal in clause 18? Why did they not have the guts to show that they too believe in helping people sometimes rather than trying to rein them in and for ever controlling them? I am disappointed in the Labour party, but I am not surprised.

Mr. D. N. Campbell-Savours: This debate ill becomes the House of Commons at this stage of this Parliament as it ill becomes the hon. Member for Canterbury (Mr. Crouch) to make statements about the Labour party, talking of "a black mark" and of the party being "mean" and "hard-faced", when he supports a Government who have failed to increase child benefit as they should have done over the past three years, failed to act on the 5 per cent. abatement on unemployment benefit,


forced up rates for council tenants nationally, and are known throughout the country by working people as a stingy, mean Government who fail to understand the problems or realise the difficulties under which our people are living.
We must concede to some extent that there are difficulties in the south-east, where house prices are higher than in the rest of the United Kingdom, but this arrangement relates not only to the south, but to the whole country. In my part of the country one can buy a substantial dwelling for £30,000, a house that is not too easily purchased by the many thousands in my constituency who are without work, or by many of my constituents who, although working, do not earn sufficient money to be able to pay such a mortgage, whether they receive tax relief or not.

Mr. Winnick: The hon. Member for Canterbury (Mr. Crouch) said that we are mean in not agreeing to the increase in the tax relief on mortgage, but is it not a fact that the sum of money involved, £60 million, is precisely the same sum of money, as my hon. Friend the Member for Edinburgh, Central (Mr. Cook) said, that tenants have lost in the unified housing benefit scheme? Why did not the hon. Member for Canterbury protest about the poorest in our community losing as a result of that Government action?

Mr. Campbell-Savours: My hon. Friend raises an interesting point because it was the hon. Member for Canterbury, together with some of his hon. Friends, who signed an early-day motion last year, if I recall correctly, before the debate on the restoration of the 5 per cent. abatement. At that time, he was professing an interest in our electorates, and saying that he stood up, in a relatively compassionate way, for those who are less well off in our society. Confronted now with a general election and the need to pick up votes in the southern part of the country, and from all parts of the United Kingdom where those in larger properties are likely to vote Conservative, some Conservatives have switched from the relatively compassionate approach that they used to have to support a measure that the Government themselves know cannot be sustained in this period of misery for millions. It ill becomes the hon. Gentleman to support the Government on this measure when his record speaks otherwise on other occasions.
My hon. Friend the Member for Edinburgh, Central (Mr. Cook) passed me a note in a meeting of the parliamentary Labour party last night in which he told me that my right hon. and hon. Friends were having difficulty in getting the Government to give way on the important issues upon which we felt that they should give way in the Finance Bill before a general election. I went to bed last night wondering whether I was going to be here all night tonight, not knowing whether the Government would persist in their selfish approach in the protection of the better off or concede to our more humane approach—as against their resolute approach—in the protection of the worse off and poor.
It was a surprise this morning when I got out of my bed and went down to my front door to find my early morning copy of The Times in which the lead article said:

Earlier, at a morning meeting of the Cabinet, Mr. Leon Brittan, Chief Secretary to the Treasury, had been instructed to `play it tough' in negotiations with Mr. Peter Shore, the shadow Chancellor, over the passage of the Budget legislation
But Mr. Shore and his shadow Treasury team"—
and I congratulate them—
would not permit rushed legislation which included the increase in higher-rate thresholds, adjustments to investment surcharge and capital transfer tax, and the £5,000 increase, to £30,000 in the mortgage interest relief limit.
Millions of people can be grateful to my righ hon. and hon. Friends because they stood up firmly and resisted the Government's desire to press on with the Finance Bill as it was in its original form, which would have provided even greater sums of money than will now be the case for the better off.
If those outside who may be considering voting Conservative ask why it was that we fought the Government on this issue, let them know the answer loud and clear. We knew that what the Government were doing was wrong, immoral and unacceptable to the majority of British people. We knew that the saving that would result from the £5,000 reduction that we are seeking, contrary to the Finance Bill's recommendations, could be spent in other areas, if it is the Government's intention to allocate that £60 million to an area of housing budget.
Some council houses in my constituency are desperately in need of public money. They have windows that are dropping out and doors that are unrepaired. There are houses that need painting, roofs that need repairing and guttering that needs fixing. Those are all forms of housing repairs that demand money from the Government. That money has not been forthcoming. The Government, during the past four years, have successfully squeezed the housing budgets of local authorities and have made it increasingly difficult for councillors fairly to represent their constituents living in council houses and to provide for their repairs.
Some tenants in my constituency live in properties belonging to the Northern Housing Association. That organisation owns nearly 6,000 dwellings in my constituency. Some of those tenants are constituents of the Financial Secretary to the Treasury, who will know, as he must receive the same type of complaints as I receive, that those houses are desperately in need of repairs money. The Government have been steadfast and resolute in their refusal to fund the necessary repairs and maintenance programmes to keep those properties in a reasonable condition. That is another reason why the Opposition consider that the £60 million should not be used to help better off people in society to purchase their homes.
Many constituents find it increasingly difficult to live on what, in real terms, are falling levels of benefit. They require larger rent and rate rebates, because they cannot manage at present. If the money were available for housing budgets, it could have been put into such budgets to help the poorest members of society. My hon. Friend the Member for Edmonton (Mr. Graham) referred to the £65 million that could have been used to tidy up the inadequacies that exist in the unified housing benefit scheme, introduced by the Government. The Opposition consider that that measure demands extra resources, as against funnelling money into the purses of the better off members of society. Furthermore, local authority housing lists are lengthening. The problem affects every constituency in the country, including those of Conservative Members.
The Allerdale district council, which is in my constituency, and has one of the finest housing records in the United Kingdom, had to wind down its house building programme after the Government had been elected because it realised that public moneys would not be made available for the further development of council housing. As a result, more people are living in fewer houses, and more are waiting for local authority accommodation.
Problems also arise in national parks, not only in my constituency but in the constituencies of Conservative Members—especially those of Cabinet members—in the Lake District. Those constituencies are finding it increasingly difficult to get accommodation. However, the Government can find housing money to subsidise further the mortgages of the better off people in society, even in Cumbria.
When the Labour Government left office in 1979 broad equity existed between the subsidies that were paid to council tenants nationally and those that paid to fund relief for mortgagors. That equity was broken by the present Government. Far greater proportions of public money are now channelled into the pockets of those who pay mortgages while a smaller proportion is channelled into the pockets of those who pay rent to local authorities. The latter group has had to bear the brunt, under this Government, of the international and domestic recessions. In such conditions, that group needs special protection from Government. Yet again, immediately prior to a general election, such people will find Conservative Members refusing to protect their interests as distinct from those of the better off. If there is any doubt about that being the Government's intent, the Committee need look no further than a question tabled by the hon. Member for Gosport (Mr. Viggers) who asked the Chancellor of the Exchequer
what would be the estimated cost in tax revenue lost of raising the ceiling on the amount of a mortgage for which interest payments are allowable against income for personal taxation from £25,000".—[Official Report, 29 November 1982; Vol. 32, c. 77.]
The hon. Member sought to raise the limit, not to £30,000, as the Government monstrously proposed in the previous Budget, but, more terribly, to £35,000.
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In an article in Financial Weekly earlier this year, Mr. David Smith referred to Conservative Members of Parliament and others in the building industry who wished the Government to raise the threshold from £25,000 to £35,000. The Chief Secretary to the Treasury, however, specifically set out to protect the interests of owner-occupiers as against the interests of the poorer members of society.

Mr. Peter Viggers: Is the hon. Gentleman aware that if the £25,000 figure set in 1974 were to be indexed with the increase in house prices the amount would not rise to £35,000 but to £57,000?

Mr. Campbell-Savours: Indexation may well be a priority for Conservatives if it means the protection of the people whom they represent in the House of Commons. Indexation is part of the package of the debate about priorities. In today's conditions, when the Financial Secretary and his colleagues have dealt with successive Finance Bills during the past few years and have repeatedly stated that the Government need the money to fund programmes of tax concessions that they have

introduced to fund the better off elements, the hon. Member for Gosport should not use that argument. Does he feel no obligation to those who are worse off? Does he not feel that people who draw little benefit at the end of the week have a prior demand on the public purse as against owner-occupiers? Does the hon. Gentleman wish to address himself to the position of the poorest people in society? It seems that when he is pressed on a sensitive point affecting millions of people he wishes not to intervene but to protect the better off.
The forthcoming election will be important for the country. The electorate will have a choice to make. Either they vote for a political party that shows compassion and understanding and has a humane approach to their problems, especially when they are confronted with deprivation, or they vote for a party that has no compassion, no desire to protect the poorest in society and is devoted and resolute in its approach to supporting and protecting those who have as against those who have not.

Mr. Richard Page: I am glad to have the unexpected pleasure of taking part in this debate. My position this morning was not dissimilar from that of the hon. Member for Workington (Mr. Campbell-Savours). I was prepared to be in the House all night and to defend the increase to £30,000 on mortgage relief. However, when I picked up my copy of The Sun from my front door I read that the mortgage tax cuts had been scrapped.
This debate lifts the veil from one corner of Labour party thinking. It shows an inherent dislike of home ownership and illustrates the politics of envy, as my hon. Friend the Member for Folkestone and Hythe (Sir A. Costain) said in his valuable contribution. It shows the Labour party's complete and utter lack of understanding about how the home ownership market works. I can quite understand the Labour party being against home ownership, because it strikes at the core of its desire to have central state domination. Home ownership gives art independence of mind and thought that the people of this country have always cherished and needed. The Conservative party will give the people that independence.
I shall illustrate the advantages of increasing the figure from £25,000 to £30,000. The chains of house purchase are long and elastic, and move up and down. Despite what Opposition Members have said, the taxes on our salaries make it extremely difficult for people to fund and purchase more expensive houses. If the more expensive houses at the top are not sold, the cheaper houses at the bottom cannot be moved. It is our declared aim to see more and more people owning their own homes. I am delighted that about 500,000 people should have had the advantage of buying their homes as a result of the Conservative party's policy.
Unfortunately, I cannot reply to the hon. Member for South Ayrshire (Mr. Foulkes), because it seems that he may have gone to Scotland to defend his seat. He spoke about £25,000 buying a mansion. However, I can tell him from experience that to buy a place in London about the size of the Table in the Chamber would cost £25,000. The buyer would need a little more money if he wanted to add a bedroom to it.
Opposition Members have suggested how the £65 million of relief could be better used to help the British people but not one of them has even thought of the multiplying effect of that sum. If tax relief is given on the


interest, it will enable people to buy and build more expensive houses and to move up the range. The tax relief will be a multiplier and will depend, of course, on interest rates and on the rate of tax that the individual pays.
For example, let us suppose that someone buys a house with a 10 per cent. interest rate mortgage and that he is paying 50 per cent. income tax. Hon. Members can work out that tax relief would give him a purchasing ability of an extra £2,500. That is a multiplier of 10. Therefore, the small amount of relief given will generate considerably greater activity in the building industry. We have been told that if the £25,000 was indexed to inflation, it would be £80,000. My hon. Friend the Member for Gosport (Mr. Viggers) said that if the figure was indexed to house prices it would be £57,000. Therefore, what is wrong with raising the ceiling to £30,000? Quite a few Conservative Members would have liked the figure to be raised to £35,000. I hope that my right hon. and learned Friend the Chief Secretary will consider increasing the figure to £35,000 when he
The Opposition have moved an amendment of envy to block the movement of house purchase, and hon. Members should consider how it will impede this country's recovery. A glance back to the 1930s shows that the house construction industry led the way out of the depression. The increase in the private sector, which is now at record levels, would have been given even more impetus if the figure had been increased from £25,000 to £30,000. The Labour party is blocking that. I wish that Labour Members would adopt the American attitude. When an American who is pushing his bike down the road or working in the garden sees a Cadillac go by, he does not say, "Gosh, I would like to see him out of that Cadillac and walking on the sidewalk," but rather, "If I work, scheme and make an effort I, too, can have a Cadillac." Labour Members want everyone to live in one-bedroomed houses. They do not want them to have a car, or anything. We want to give people the opportunity to improve and to climb up the ladder.
I abhor the petty nature of the amendment. I know that Opposition Members are frightened at the thought of a general election. But I believe that my hon. Friend the Member for Canterbury (Mr. Crouch) hit the nail on the head when he said that there was something behind the scenes that made them behave this way. I suggest it may be their selection committees, back at base. Even now, at this late stage, I hope that the amendment will be withdrawn and that we can return to the £30,000 limit. If not, I hope that, on our return, my right hon. and learned Friend the Chief Secretary will ensure that we give home owners the chance to buy their homes with a limit of at least £30,000 and perhaps more.

Mr. Straw: We are all very glad to have had an opportunity to debate this issue. It has given us a foretaste not least of how the Conservative party intends to conduct its election campaign. Bereft of policies to put this country back to work, to solve the housing crisis or to produce peace in this country, it intends—as we have seen this afternoon—to spend the next four weeks smearing the Labour party with the most extravagant untruths that it can think of. Of course, we should have expected that. There has not been one general election this century when the Conservative party has failed to resort to lies and untruths about the Labour party and its intentions.
We remember the Zinoviev letter in 1924. Indeed, the hon. Member for Hertfordshire, South-West (Mr. Page) came very close to suggesting that we were being manipulated by the Kremlin because we had moved this amendment. We also remember that, in 1945, the much-respected leader of the Conservative party, Mr. Winston Churchill, conjured up the spectre of a Gestapo if the Labour party came to power. However, when it came to power, it provided greater social benefits and made more changes for the better in our society than had so far been seen this century.
The smear that the Conservative party is putting about, which it knows to be without any foundation, is that the Labour party does not believe in home ownership. That is simply a lie. My hon. Friend the Member for Edinburgh, Central (Mr. Cook) reminded me that Aneurin Bevan said that every man should own his own house and that no one should own someone else's house. That has always been our position. We see nothing inconsistent in the ownership and extension of individual property while at the same time seeking to ensure that the means of production are utilised to the benefit of society as a whole.

Mr. Richard Page: Is the hon. Gentleman going to adopt all the words of Aneurin Bevan in his election campaign?

Mr. Straw: That is a silly and trite point. However, we could do very much worse. An inspection of the Labour party's record—not just of its intentions—shows that it is the Labour party, not the Conservative party, that has made real strides in the past 25 years to help home owners. As my hon. Friend the Member for Walsall, North (Mr. Winnick) reminded us, it was the Labour party which introduced the Leasehold Reform Act 1967 and the option mortgage scheme. It was my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), the shadow Chancellor, who, as Secretary of State for the Environment, introduced schemes to help first-time buyers. Those measures have been far more significant in helping the private sector of home ownership than anything the Government have done. We need no lectures from the Conservative party about home ownership or about our commitment to extend it. The simple truth is that the Government, by their policies of throwing 2 million on to the dole and of reducing the living standards of hundreds of thousands more who are receiving less than average earnings, have denied home ownership to hundreds of thousands of people—far more than could conceivably be assisted by the measure before us.
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The second truth is that, if £60 million is available to help the housing industry, and that is the only justification for this measure, there are far more effective and better ways of spending £60 million to help the construction industry and to create more homes for people. I could take Conservative Members to houses not more than two miles from the House where married couples, who must live in slum conditions with no bath and no hot water and must face a climb of four flights of stairs, cannot even contemplate having children because there is no guarantee that they will be provided with decent accommodation when those children arrive. The reason that they are stuck in the most appalling slum conditions is that over the past four years the Government have collapsed the housing programme. Conservative Members must not lecture us


about the housing needs of the nation because over the past four years this Government have increased the misery of millions of people in housing need and have done virtually nothing to help them. Moreover, Conservative Members should not lecture us about the construction industry, because 400,000 construction workers have lost their jobs and hundreds of thousands of construction firms have become bankrupt on a scale far greater than has happened in previous recessions this century.
This measure will barely affect activity in the construction industry. A decision to spend £60 million on real help for the construction industry, on direct assistance through orders for firms in the construction industry, would have helped. That is our challenge to the Government. We suggest not that they should keep this money, but that they should use it in a different way immediately to provide thousands of jobs in the construction industry and to provide real new homes for people in need.

Mr. Viggers: The hon. Gentleman takes pride in the work of previous Labour Governments to help home ownership. Had the £30,000 limit been agreed, it would have allowed someone on the average industrial wage of about £150 a week to receive full tax relief on his mortgage. Is it not a sign of how far the Labour party has drifted from its traditional roots that someone now earning £7,500 a year will not be able to get full relief on four times his income, which is the normal amount allowed by building societies?

Mr. Straw: It is a sign of the strange world the hon. Member for Gosport (Mr. Viggers) inhabits that he even contemplates the idea that a man on the average wage of £7,500 could in any circumstances receive a mortgage of more than £25,000. It is not possible, becase the usual multiplier on which building societies work is two and a half times income and even if they worked on three times the income it would produce a mortgage of only £22,500. Even people in the south-east would have to earn in normal circumstances well over £10,000 a year even to contemplate the servicing of a £25,000-plus mortgage.
I should like to deal now with the important matter of principle which has led the Opposition to oppose the Government's proposal to increase the limit from £25,000 to £30,000. That important issue of principle should be prompted in Conservative Members' minds not least because the Government have had four opportunities over the past four years to increase this limit, but, on each occasion, until the last Budget, have refused to do so. Moreover, the previous Labour Government had an opportunity after 1975 to increase the limit four times but on each occasion declined to do so. Why then have Governments of both parties over the past eight years declined to increase the limit from £25,000?
The reason is that, while it has been accepted on both sides of the House that if a tax limit is increased some individuals who are buying houses at that stage benefit directly, it has also become clear that, overall, house purchasers do not benefit from such increases in allowances. The benefit of an increase over time does feed its way through not in dramatically increased activity in the construction industry, but in house prices. In other words, quite quickly, the benefit which we are discussing will be reflected not only in the improved ability of

individuals to buy houses but in higher prices which will negate the benefit which they as individuals have gained from any marginal increase in allowances.

Sir Kenneth Lewis: The hon. Gentleman makes a serious point but I think that he is wrong. Does he accept that if one increases the limit to £30,000 as the Government propose, many first-time buyers can move up the housing market, which makes available cheaper houses to those waiting in the queue who wish to buy? I understand from listening to Opposition Members that they wish to help first-time buyers. My right hon. and learned Friend the Chancellor has helped the first-time buyer because he has helped the mobility of the market. The Opposition seek to destroy the mobility of the market.

Mr. Straw: I do not accept what the hon. Gentleman says and I shall explain why. In the short term, there is some force in what he says—that has been the judgment of the Treasury, of the Government as well as of the Opposition — but the apparent benefit of increasing allowances in this way is lost because prices increase. What Conservative Members must face—whether they face it before the election or not—is that, if money is available to stimulate activity in the housing market, what is proposed is the least beneficial way of spending it. Far better either to spend it directly on orders for the housing industry or directly on subsidies to identifiable first-time buyers, along the lines of the schemes introduced by the previous Labour Government.
My arguments have been accepted by the Treasury over the past four years. That is why the Chief Secretary has resisted calls from his colleagues at every Budget debate over the past four years to increase the allowance. It hardly lies in the mouth of the Chief Secretary now to suggest that our opposition to an increase in the allowance is mean or vindictive when he has been deploying exactly the same argument against his colleagues in Government that we have deployed this afternoon.
It is significant that, when I put to the Chief Secretary the charge that the Treasury had opposed in the pre-Budget discussions any increase in this sum and had agreed to an increase only under great pressure from No. 10, he never sought to deny it. That, as we all know, is the truth. It is arrant cant for the Chief Secretary now to categorise our action as mean-minded and vindictive when he has used —he knows it very well—exactly the same argument to oppose an increase in this allowance not only this year but in every one of the previous four years.

Mr. Brittan: The hon. Gentleman should know better. He knows, from when his party was in power, that any attempt by me to disclose who said what in the discussions on the proceedings of the Finance Bill would have been wholly in vain. It is unworthy of him to try to draw conclusions from that.

Mr. Straw: The Opposition draw conclusions not only from the press reports but from the record, which shows that during the past four years the Chief Secretary and his Treasury colleagues have resisted any increase in the allowance — and for the same reason that we resist it today.

Mr. Viggers: The hon. Gentleman and I both sat on Finance Bill Committees over the past three years. On three occasions I moved amendments to increase the limit.


On each occasion the Chief Secretary assured me that the Government intended to increase the limit when they could do so, but that it was a matter of priorities.

Mr. Straw: That was not quite the half-hearted language that the Chief Secretary used. He put the hon. Gentleman off with a few carefully chosen words. I agree that the hon. Gentleman has been persistent on this matter, although quite wrong. His Front Bench colleagues resisted his amendments for the same reasons that the Opposition are pressing these amendments tonight. If money is available it should not be spent in this way. The only reasons that the Government have conceded a change is pressure from No. 10 and to bribe the electorate in advance of the general election.
The second issue raised by the debate is that of fairness in taxation. The Opposition need no lectures from the Government on that, given the Government's record. They should hang their heads in shame whenever personal taxation is mentioned. They went to the country in 1979 with categorical promises to lower the rate of taxation at all levels of income, yet they have increased taxation at all levels, other than for the very rich. Those on average earnings, about whom Conservative Members' hearts have bled this evening, are paying an additional £7 a week in taxation, while those earning £40,000 a year are paying £24 a week less. That is the reality of the Government's practise of the politics of greed.
The Government should not lecture the Opposition on the need for fairness in taxation. During the past four years the Government have destroyed 2 million jobs and have collapsed — [HON. MEMBERS: "Reading."] I am not reading. I have a blank piece of paper in front of me. This Government—[HON. MEMBERS: "Reading."]

Mr. Cook: What is wrong with reading?

Mr. Straw: My hon. Friend is right to ask what is wrong with reading. However, I am facing a blank sheet of paper.
The Government have increased unemployment by 2 million. They have collapsed the housing hopes of hundreds of thousands of people. They are tonight trying to defend a measure that is symptomatic of their practise of the politics of greed. They are trying to give to those who already have a good deal while taking away from those whose living standards they have destroyed. It is unfair, and does not stimulate the housing market or housing opportunities. We put forward our amendments on that basis.

Mr. Harry Greenway: I wish to comment on the behaviour of the Opposition. The price of homes in London and the south-east, even for first-time buyers, is, unfortunately, well above £30,000. The Opposition's attitude is damaging to those in my constituency, in London, in the south-east and, indeed, throughout the whole country, who wish to buy a home. I do not accept the Opposition's claim to be committed to home ownership. If that were true, why did they—as well as the Liberal and SDP parties—vote against the right-to-buy provisions in the Housing Act 1980? Why have they sought to take away the right to buy from council

tenants? The availability of council homes will not be affected if the limit is raised to £30,000, so that argument falls to the ground.
It appears that not one Opposition Member does not own his home. Why, then, do Opposition Members, collectively and individually, wish to deny home ownership to others? It is a sign of the long-standing principle of the Labour party, which is, "What is yours is mine, and what is mine is my own".
When I was a Conservative candidate in east London, the local authority owned more than 90 per cent. of housing in the area. I saw the misery and corruption of that. People wanting to own a home had great difficulty in getting through the bureaucracy. Those in homes found it impossible to move, especially as they grew older. Some elderly people were in homes with three or four bedrooms, and found it impossible to be rehoused in a one-bedroomed home. A great deal of potential space for families was lost because of that. Some people had been on the housing waiting list for 40 years. People who wish to buy their homes will be denied that opportunity because of Opposition actions.
We need to encourage house building. I am glad to note that private housing sector starts have increased by 30 per cent. since 1978–79. More homes will be bought if the £30,000 limit is introduced—which I am sure it will be after the general election when, it is reasonable to presume, there will be another Conservative Government. There will be more work for the construction industry and jobs will be created.
The Opposition talk about subsidies. Perhaps they should spend a little more time discouraging Labour local authorities from forcing up rates to astronomical levels, and they would then put their hearts where their mouths are. Rates have been increased by the Labour-controlled GLC by almost 150 per cent. in two years, and jobs have been lost because of that. People would not face so many economic difficulties if the rates had been held down and the GLC did not throw about public money in such a disgraceful way.
Council house tenants are harmed by the inexorable rise in rates imposed by Labour authorities. Ealing could have cut the rates this year had not the GLC forced such a high precept on the local authority. My plea is that those who wish to buy their homes should be given a better opportunity to do so. It has been said throughout the ages that an Englishman's home is his castle. The Labour party does not give a damn about that.

Mr. Peter Bottomley: If I had a free choice, I should prefer extra housing help to be given in the form of the relief of stamp duty, which would help mobility more. The whole housing support system needs to be considered together with the tax and benefit systems, bringing in the family perspective and life cycle. However, those are arguments for another Parliament.
It is important to contrast the demands of the Opposition on this issue, which affects a small number of people, with their insistence that the Housing and Building Control Bill, which affects many people who are much worse off than those who would get the extra benefit of mortgage interest relief, should be dropped. I believe that the electorate will take as much note of the contents of that Bill as of those of the Finance Bill, and will conclude that the Opposition have gone wrong in giving time and attention to this small issue of mortgage interest relief—


on which my views are well known—and have made an even greater mistake in insisting that poorer tenants should not be given the opportunity to get on the owner-occupation ladder at all. I hope that, after the election, my right hon. Friends will make sure that the Housing and Building Control Bill is brought back even more quickly than clause 18 of the Finance Bill.

Amendment agreed to.

Manuscript amendment made: In page 10, line 4, leave out from land)' to end of line 45 and insert:—
'the references to £25,000 shall have effect for the year 1983–84.
(2) Nothing in this section requires any change to be made in the amounts deductible or repayable under section 204 of the Taxes Act (pay as you earn) before 31st August 1983.
(3) Notwithstanding anything in the preceding provisions of this section, the amounts deductible or repayable under section 204 of the Taxes Act on and after 11th May 1983 and before 31st August 1983 may be such as would be requisite to give effect to the provisions as to relief for interest contained in a Resolution passed by the House of Commons on 21st March 1983: — [Mr. Robert Sheldon.]

Clause 18, as amended, ordered to stand part of the Bill.

Clause 19

LOAN INTEREST PAID UNDER DEDUCTION OF TAX

Question proposed, That the clause stand part of the Bill.

The Financial Secretary to the Treasury (Mr. Nicholas Ridley): Clause 19 deals with some minor technical deficiencies in the Act of last year that brought in mortgage interest relief at source. I would be happy to reply to any questions about it that hon. Members may wish to raise, but this is also a good opportunity for me to clarify the change affecting mortgage relief at source. I am indebted to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) for having asked a helpful parliamentary question on 4 May, in answer to which I was able to set out in full what has happened.
In order to make the picture clear it is necessary to go back to August 1982, when there was a fall in mortgage interest rates, followed by another fall in November. Those two falls resulted in less tax relief being available to taxpayers. As a result, the Revenue granted excess relief, which will have to be taken back over 1983–84 in codings and assessments. That series of events added up to a small interest-free loan from the Revenue to the taxpayer. Admittedly, it is always unpleasant to have to pay anything back. The change to mortgage relief at source itself makes no difference whatsoever to the taxpayer, whose mortgage remains on the same basis. In addition, there are now the increases in national insurance surcharge and the much larger reductions in income tax contained in the Budget.
A married man on average earnings with a £16,000 mortgage, which was the average last year, had a net take-home pay after tax and mortgage interest of £82·29 in August last year. In May this year—even assuming that he had had no increase in earnings at all—his net take-home pay would be £88·70. Everyone with a mortgage will be better off in May this year than he was in August last year. I strongly urge anyone who believes that he is not better off, or that something has gone wrong with his coding or with the arrangements for the deduction of his

tax, to get in touch with the tax inspector, who will put the matter right. Nobody has been denied relief, and there is no reduction in the relief available.

Mr. Robert Sheldon: As the right hon. Gentleman will know, I am awaiting replies to two further questions to which holding replies have been given. Will he say whether a person with an average mortgage and average earnings was better off in Budget week than he will be next week?

Mr. Ridley: I am not aware of the right hon. Gentleman's other two questions, but I will make sure that he receives answers to them before he leaves us on Friday.
It is impossible to answer his question in relation to any individual taxpayer or week. However, what commentators have done, and what the hon. Member for Bedwellty (Mr. Kinnock) has done — although, as shadow Secretary of State for Education and Science, he, at least, should be educated in the matter—is to take account of the reduced tax relief caused by the fall in mortgage interest but fail to take account of the value of the fall in mortgage interest. By manipulating the figures with great care and, I am afraid, with deliberate intent to deceive, they have managed to find circumstances—from month to month or week to week — in which people can be made to appear worse off. Any impartial observer studying the figures I gave in Hansard on 4 May must agree that nobody could he worse off and that everyone must be better off.
There are further advantages. The Inland Revenue has saved over 1,000 members of staff by the introduction of the new method, and, in addition, the problem of the reduction or increase in tax relief due to falls or rises in mortgage interest will never occur again, because it will be taken into account at source and will not have to be effected in taxpayers' assessments or codings.

Question put and agreed to.

Clause 19 ordered to stand part of the Bill.

Clause 20 disagreed to.

Clause 21 ordered to stand part of the Bill.

Clause 22

RETIREMENT ANNUITY RELIEF: EARLY RETIREMENT

Question proposed, That the clause stand part of the Bill.

Mr. Ridley: I should like briefly to explain the details of the clause. For a long time, my hon. Friend the Member for Beckenham (Sir P. Goodhart) and others have pointed out that sportsmen and others whose careers peter out very early due to anno domini have been denied the full benefits of retirement annuity relief. The clause will be of great benefit to footballers, jockeys and others who have hitherto been unable to obtain those benefits, and I believe that the Committee will welcome it.

Question put and agreed to.

Clause 22 ordered to stand part of the Bill.

Clause 23 ordered to stand part of the Bill.

Clause 24

LIVING ACCOMMODATION PROVIDED FOR EMPLOYEE

Question proposed, That the clause stand part of the Bill.

Mr. Britton: This clause provides for an additional charge to tax for any employee who by reason of his employment is in beneficial occupation of living accommodation costing more than £75,000.

Question put and agreed to.

Clause 24 ordered to stand part of the Bill.

Clause 25 ordered to stand part of the Bill.

Clause 26

COVENANTED PAYMENTS TO CHARITY: INCREASE OF EXEMPTION FOM EXCESS TAX LIABILITY

Question proposed, That the clause stand part of the Bill.

Mr. Brittan: This clause raises to £5,000 per year the present ceiling of £3,000 for higher rate tax relief for payments made to charities under deeds of covenant. It thus provides substantial assistance to charities over and above all the other measures introduced during the Government's period of office.

Question put and agreed to.

Clause 26 ordered to stand part of the Bill.

Clause 27

RELIEF FOR INTEREST: MONEY BORROWED FOR INVESTMENT IN EMPLOYEE-CONTROLLED COMPANY

Question proposed, That the clause stand part of the Bill.

Mr. Ridley: I had hoped that the right hon. Member for Orkney and Shetland (Mr. Grimond) would be here, as he has urged measures of this kind and I am sure that in the twilight of his parliamentary career he will be pleased to see this provision made. The clause enables employees to receive tax relief on interest paid on loans to buy shares in an employee-controlled company as part of an employee buy-out.
There are one or two problems with regard to the clause which I believe would benefit from fuller examination in Committee. I am sure that this Government will take a suitable opportunity in the future to return to various suggestions for improving the clause. I do not wish to give the impression that our minds are closed to future improvement, but I am sure that it is better that the provision should be on the statute book in the meantime as some employees may have the opportunity to buy out their company, to form genuine worker-controlled companies and to profit and prosper thereby, which will be good for jobs, good for property ownership and good for the economy.

Question put and agreed to.

Clause 27 ordered to stand part of the Bill.

Clause 28 ordered to stand part of the Bill.

Clause 29 disagreed to.

Clause 30

RELIEF FOR INVESTMENT IN CORPORATE TRADES

Question proposed, That the clause stand part of the Bill.

Mr. Anthony Beaumont-Dark: On a point of order, Mr. Dean. Are we taking schedule 5 with clause 30?

The Chairman: No, we are going straight through in the order of the Bill.

Mr. Beaumont-Dark: In that case, I seek your guidance, Mr. Dean. I wish to talk about business expansion schemes. With all the legal terminology, we cannot understand any better than the Revenue what is really meant. Is it in order to discuss what is meant by quoted and unquoted companies at this stage, or should it be dealt with on schedule 5?

The Chairman: It is certainly not in order on clause 30, but I am sure that if the hon. Gentleman uses his ingenuity he will find an appropriate clause or schedule on which to make his points.

Mr. Ridley: Further to that point of order, Mr. Dean. Perhaps I can help. Clause 30 introduces schedule 5 which sets out the details of the business expansion scheme provisions. One of the details is that the scheme is restricted to unquoted companies. That may be the point that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) wishes to discuss. It is, of course, entirely for your judgment, Mr. Dean, as to whether you prefer my hon. Friend to raise the matter on clause 30 or on the schedule, but I think that he is in the right territory.

The Chairman: I am obliged to the Financial Secretary for that helpful comment. It might be tidier if the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) raised his points now.

Mr. Beaumont-Dark: I am obliged to you, Mr. Dean, and to my right hon. Friend the Financial Secretary. I do not wish to delay the Committee, but one of the problems of the necessary but unseemly haste with the Finance Bill is that we shall achieve a Bill full of good intentions but giving rise to awful problems which I hope that the Government will sort out at leisure after 15 June when many of us hope to return.
The idea of the business expansion scheme was excellent and has been a great help to people starting up in business. The extension of the scheme to cover larger sums of money is also entirely good, but I do not understand the weird logic of the proposal. It shows that the Revenue does not understand what dealing is all about and what "dealing in" can mean. Despite the good intentions, this will be very bad law and will cause enormous problems. It will cause further difficulties for investors because the Government will be giving advantage to what are described as over-the-counter stocks. The term used to be "bucket shop". They are not all bucket shops now, but there are still a large number of them in the over-the-counter market.
As the House knows, I am a member of the stock exchange. The stock exchange very properly decided that it should try to help companies which did not wish to go through the full listing procedure. It also felt that investors


should be properly protected because of some of the scandals that had taken place. It therefore started the unlisted share market. Clearly, there is still a higher risk but the stock exchange successfully laid down extremely rigid controls on the way in which companies could be listed on the USM. Although such companies do not have a full stock exchange listing, they can be dealt in. In my view, the stock exchange rules are far stricter than those which might be enforced in a court of law. That is right, because the job of the stock exchange is to ensure that people are dealt with properly and fully.
Only last week we decided to get down to controlling licensed dealers in securities in the over-the-counter market. The Gower report rightly recommended that new controls should be introduced. The Government are now putting the cart before the horse and giving free rein to licensed dealers. There is no doubt that more people will wish to go to the over-the-counter market. The Government seem to have adopted the weird logic that if shares are not dealt in often they are not dealt in at all. Two weeks ago, a company was floated on the over-the-counter market for £350,000. This is the type of dealing that the Conservative Government are backing against the fully regulated market. The licensed dealer who placed the £350,000-worth of shares on the market was also the financial adviser to the company, the person who makes the market in that share and the largest shareholder to boot.
Anyone who does not realise that such dealings can lead to irregularities in the future does not understand what a market place is. The stock exchange would rightly not have allowed the situation to arise. Licensed dealers should be far more tightly controlled and they should have to provide a guarantee for their customers against people running off with their money. Yet today the Government seek to pass a measure giving the over-the-counter market an advantage compared with the stock exchange regulated market.
Frankly, I wish that we were in Standing Committee, because I would urge Minsters to think again about this. I prophesy that problems will arise if such an advantage is given to this rather weird market on the basis that shares are not dealt in at all because they are not dealt in very often. The stock exchange has gone to great trouble to ensure that the unlisted share market is properly regulated. To make sensible competition and control of sales impossible vis-a-vis quoted companies is quite wrong. Had there been the opportunity, I should certainly have voted against the provision and urged others to do the same. Now that my right hon. Friend the Financial Secretary and his officials understand a little more about the problems that are likely to arise, he may consider even now that the provision should be withdrawn and introduced in the next Finance Bill as there is no hurry about it. If he will not follow that sensible procedure, will he at least agree that this can be re-examined when the next Budget is introduced to ensure that we do not give advantage to those who could so easily lose investors' money which as a Government we wish to protect?

Mr. Ridley: I am sure my hon. Friend would not dissent from the proposition that this is a splendid and imaginative scheme which could be of immense benefit to the smaller and newer or expanding business. The scheme is unrivalled anywhere in the world. The last thing that I want to do is to withdraw the clause from the Bill. I pay tribute to the Opposition for their agreement that the clause

should be allowed to go forward. In due course much industrial activity and many jobs might hang on the scheme.
Even if there are defects in the scheme and points in the clause which would benefit from thorough debate, it must be better to allow the scheme to pass into law so that the investments can take place in certainty. Of course, in debates on a future Finance Bill, when we have an increased majority, it will be possible for my hon. Friend and my many new hon. Friends to put down amendments to make changes in the details of the scheme. If I am still here, I shall welcome those debates because I will be able to say that there is a justification for everything that we have put into the scheme, that it was Ministers who decided on these provisions and that Ministers will defend them, as I intend to defend the provision about which my hon. Friend has spoken.
This scheme is to encourage investment, first, in startup companies and, later, in small unquoted companies which are capable of expansion. There are many reasons why that investment did not happen in the past. It was safer and easier to invest in quoted stocks on the stock market. They benefited from the protection to which my hon. Friend referred. It was probably safer and easier to buy a house on a mortgage or to buy gilt-edged stock.
Of all the categories of investment, the most risky and dangerous was that of small commercial companies. The Government first set about encouraging investment in start-up companies with generous tax reliefs. Now we have extended the relief to all companies, old or new, which are perhaps too small to be quoted yet cannot have access to rights issues and capital raised on the stock market.
I think my hon. Friend will agree that this was the priority area to go for and that the same considerations do not apply with quoted companies as with unquoted companies. Their shares can be marketed easily and there is no difficulty in raising extra capital because they go to the market, whereas with unquoted companies, particularly small and unknown ones, there is great difficulty in finding someone to invest in them. Therefore, there was a great need to ease the process with tax relief.
The question is: where do we draw the line between the quoted and unquoted sector? I think that we were right to draw it short of the unlisted securities market, which raised about £50 million last year by rights issues and other methods for companies thereby quoting. It would have cost us a further £25 million to provide tax relief there, without any obvious increase taking place in investment. Companies can raise capital and go for rights issues or sell in the unlisted securities market without the difficulties that I have mentioned.

Mr. Beaumont-Dark: Even now the Minister has not got it right. All those things can be done in the over-the-counter market. The criticism the Minister seems to have of the unlisted share market is that it has been efficiently policed and properly conducted. If it had been a small, shambolic thing which had not done any good to the economy, it seems that the Minister would have given concessions such as he is willing to give to much less disciplined licensed dealers. I do not understand my right hon. Friend's logic.

Mr. Ridley: We are not giving a concession to a market.

Mr. Beaumont-Dark: My right hon. Friend is.

Mr. Ridley: We are giving a concession to investors in a certain class of company. We are giving them this concession for the very reason that my hon. Friend has stated. These are small and growing unquoted companies, about which not nearly so much is known and for which there is no policing by the stock exchange. My hon. Friend gave the example of a company which was floated the other day with £350,000 capital; I do not know what company that was, but it shows what the risks are. That is why tax relief is granted in a risky situation. It is not only risky in that way but much more in the sense that these companies are dark horses and it is not known which will survive and grow and which will fall.
We must draw the line somewhere. I believe that it is right to draw it after over-the-counter markets and before unlisted securities markets. I only hope that the passage of this legislation on to the statute book will be taken by all concerned as an earnest of the Government's real intent to provide risk capital relief at greater advantage than investment in any other area. This is the most risky area, where the greatest tax relief should be. I hope and believe that the tax relief will lead to a massive increase in the prosperity of small companies and in the jobs they provide.

Mr. Robert Sheldon: There is the danger of the lack of regulation that the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) has pointed out. There are other dangers. There are so many points in this clause that should have been subject to the scrutiny of the Standing Committee that we were under great difficulty over whether to let it go through. Bearing in mind the value it could have for small businesses — a value which has frequently been overstated — we decided to let it go through because we hope to amend it in a subsequent Finance Bill

Question put and agreed to.

Clause 30 ordered to stand part of the Bill.

Clause 31 ordered to stand part of the Bill.

Clauses 32 and 33 disagreed to.

Clause 34

EMPLOYEES SECONDED TO CHARITIES

Question proposed, That the clause stand part of the Bill.

Mr. Brittan: This clause proposes a small change in the tax rules to make the cost of an employee seconded to a charity a deductible expense for corporation tax purposes. The general rule is that a company may deduct for tax expenditure incurred wholly and exclusively for the purposes of its trade. Under the present law the salaries and associated costs of an employee whom a company makes available to a charity for a temporary period are not allowable for tax because they do not satisfy the business purpose test.
There have been representations that the law as it stands discourages companies from making staff available to charities as, by doing so, the companies lose tax relief for the salaries which they continue to pay during the period of secondment. The Government recognise the force of these representations and are satisfied that it is right to make an exception to the deduction rules for this very limited case.
The Government believe that this modest but useful change will be generally welcomed. It will assist the community to help itself by encouraging business to support the voluntary sector in a practical way. Charities can benefit greatly and in many ways from the expertise that suitably experienced personnel on loan from the business world may bring to their operations. This is another example of the way in which the Government are seeking to assist charities, and I commend the clause to the Committee.

Question put and agreed to.

Clause 34 ordered to stand part of the Bill.

Clause 35 ordered to stand part of the Bill.

Clauses 36 and 37 disagreed to.

Clause 38

GROUP RELIEF: DISPOSALS BEFORE COMPANY ENTERS GROUP

Question proposed, That the clause stand part of the Bill.

Mr. Viggers: I should point out that I have been told by my colleagues in the building industry, with which I have a connectiion, that clauses 38 and 39, as presently drafted, may result in some uncertainty. Had we discussed the matter in Committee, it would have been possible to point out that amendments Nos. 34, 35 and 36 dealt with that point. Although the matter has not been discussed, I hope that the point will be borne in mind in future.

Question put and negatived.

Clause 38 disagreed to.

Clauses 39 to 52 disagreed to.

Clause 53

INDUSTRIAL BUILDING OR STRUCTURE

Question proposed, That the clause stand part of the Bill.

Mr. Brittan: The purpose of this clause is to relax the conditions under which the industrial buildings allowance is restricted in the case of an industrial building, part of which is used for non-industrial purposes, such as office use.
Parts of a building used for non-industrial purposes do not normally qualify for the industrial buildings allowance. An exception is made where most of the building is in qualifying industrial use and the cost of the non-industrial part does not exceed a stated proportion of the cost of the whole building. The effect of the clause is to increase that proportion from 10 to 25 per cent.
The change will provide builders and developers with more flexibility when erecting industrial buildings. They will not be tied by the 10 per cent. limit on office and other non-industrial space. It will provide special help to the computer and other advanced technology industries, where considerable office space is often required to be located alongside industrial accommodation. The change in the law can therefore be regarded as assistance to the construction industry and a further example of the Government's assistance for advanced technology.

Question put and agreed to.

Clause 53 ordered to stand part of the Bill.

Clause 54

BUILDINGS CONVERTED INTO VERY SMALL WORKSHOPS.

Question proposed, That the clause stand part of the Bill.

Mr. Brittan: At present, a small industrial workshop not exceeding 1,250 sq ft is entitled to the special 100 per cent. initial allowance instead of the normal 75 per cent. initial allowance for industrial buildings generally. The purpose of the clause is to encourage the conversion of old buildings into industrial workshops by extending entitlement to the 100 per cent. initial allowance in those circumstances to certain industrial units which are larger than 1,250 sq ft.
The effect of the clause is that, where an existing building is converted into small industrial units, and provided that the average size of those units is not more than 1,250 sq ft, the 100 per cent. initial allowance will apply to the cost of converting all the units — those which exceed 1,250 sq ft as well as those which do not.
Again in a small way, this is a measure of assistance to industry and to the construction industry and I commend it to the Committee.

Question put and agreed to.

Clause 54 ordered to stand part of the Bill.

Clause 55

CAPITAL ALLOWANCES FOR EXPENDITURE ON PRODUCTION OR ACQUISITION OF CERTAIN FILMS ETC.

Question proposed, That the clause stand part of the Bill.

Mr. Ridley: The clause provides the transitional relief under which British films continue to qualify for capital allowances and provides for it to run on for a further three years until 31 March 1987. It gives effect to the announcement that I made on 19 January and to pressure from Committee members last year. I hope that that pressure will not be repeated, for reasons that are known. The clause is very much welcomed by the film industry and I hope that it leads to its continuing and greater success.

Question put and agreed to.

Clause 55 ordered to stand part of the Bill.

Clause 56

EXTENDED TRANSITIONAL PERIOD FOR TELETEXT RECEIVERS ETC.

Question proposed, That the clause stand part of the Bill.

The Minister of State, Treasury (Mr. Barney Hayhoe): The clause provides that for rented teletext sets entitlement to the 100 per cent. first share allowance will run until 3 May 1984. The purpose of the clause is to provide extra support through the capital allowance system for the United Kingdom electronics industry, in particular to encourage the wider use of information technology through teletext sets.

Question put and agreed to.

Clause 56 ordered to stand part of the Bill.

Clauses 57 and 58 disagreed to.

Clause 59

ELECTION FOR POOLING: INDEXATION

Question proposed, That the clause stand part of the Bill.

Mr. Ridley: The clause and schedule 10 provide the alternative method of calculating the rules for capital gains tax for shares in a pool. It was strongly urged on us last year to provide this extremely complicated alternative for those who operate with computers—large investment funds and trusts of all sorts. I am happy to have it in the Bill and I am grateful to Labour Members for allowing it to stay there. Perhaps uniquely, it might be an extremely good thing that the clause is not being debated at great length in Committee upstairs, because hardly any hon. Member would have been able to understand it However, it meets the industry's requirements and I commend it to the Committee.

Question put and agreed to.

Clause 59 ordered to stand part of the Bill.

Clauses 60 to 62 disagreed to.

Clauses 64 to 72 disagreed to.

Clause 74

INCREASED OIL ALLOWANCE FOR CERTAIN NEW FIELDS

Question proposed, That the clause stand part of the Bill.

The Minister of State, Treasury (Mr. John Wakeham): The purpose of the clause is to double the oil allowance for future freestanding oilfields. It is one of two new concessions for the future freestanding oilfields. The other is the abolition of oil royalties, for which separate legislation will be required, and would be introduced by my right hon. Friend the Secretary of State for Energy in the new Parliament.

Question put and agreed to.

Clause 74 ordered to stand part of the Bill.

Clause 75

RELIEFS FOR EXPLORATION AND APPRAISAL EXPENDITURE, ETC.

Question proposed, That the clause stand part of the Bill.

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Mr. Wakeham: This clause and the schedule introduce a new PRT relief for exploration and appraisal drilling expenditure incurred after Budget day, provided that it is not within an existing PRT field. The relief goes much wider than abortive exploration relief, which it replaces. It may be claimed immediately by a participator against any PRT-paying field in which he has an interest. The cost of the new relief was estimated to make it about £40 million for 1983–84 and, thereafter, £45 million for each of the years to 1986–87.

Question put and agreed to.

Clause 75 ordered to stand part of the Bill.

Clause 76

TERMS OF PAYMENT TO BE IMPLIED IN DETERMINING MARKET VALUE

Question proposed, That the clause stand part of the Bill.

Mr. Wakeham: The purpose of the clause is to put beyond doubt that, in ascertaining under the petroleum revenue tax rules the market value of oil, appropriated for a participator's own use or disposal other than at arm's length, normal commercial terms are to be assumed.

Question put and agreed to.

Clause 76 ordered to stand part of the Bill.

Clause 77

EXCLUSION OF OIL APPROPRIATED FOR PRODUCTION PURPOSES IN OTHER FIELDS

Question proposed, That the clause stand part of the Bill.

Mr. Wakeham: This clause removes the PRT charge on oil and gas won by a producer in one field and used by him for production purposes in another of his fields.

Question put and agreed to.

Clause 77 ordered to stand part of the Bill.

Clause 78

VARIATION OF DECISIONS ON CLAIMS FOR ALLOWABLE EXPENDITURE

Manuscript amendment made: In page 60, line 4, leave out "and section 81 of this Act".—[Mr. Wakeham.]

Clause 78, as amended, ordered to stand part of the Bill.

Clause 79 ordered to stand part of the Bill.

Clauses 80 to 87 disagreed to.

Clauses 89 to 91 disagreed to.

Clauses 92 to 94 ordered to stand part of the Bill.

Clause 95 disagreed to.

Clause 96

HISTORIC BUILDINGS AND MONUMENTS COMMISSION FOR ENGLAND

Question proposed, That the clause stand part of the Bill.

Mr. Hayhoe: This clause provides for the new Historic Buildings and Monuments Commission for England to be treated as if it were a charity and therefore entitled to charitable tax relief, which I think will be widely acceptable.

Question put and agreed to.

Clause 96 ordered to stand part of the Bill.

Clause 97 ordered to stand part of the Bill.

Clause 98

SHORT TITLE, INTERPRETATION, CONSTRUCTION AND REPEALS

Manuscript amendment made: In page 79, line 20, leave out "other than section 87".—[Mr. Wakeham.]

Clause 98, as amended, ordered to stand part of the Bill.

New Clause 4

TAXATION OF HOLIDAY FLATS (I)

`The use of land in the United Kingdom for the purposes of furnished holiday accommodation shall, if the land is managed on a commercial basis and with a view to the realisation of profits be treated as carrying on a trade or as the case may be part of a trade and the profits or gains thereof shall be charged to tax under class 1 of Schedule D.'.—[Sir Walter Clegg.]

Brought up, and read the First time.

The Chairman: With this we are to take new clause 5—Taxation of holiday flats (2)
`Profits and gains arising out of or from the use of land in the United Kingdom for the purposes of furnished holiday accommodation shall be charged to tax under class 1 of Schedule D.'.

Sir Walter Clegg: I beg to move, That the clause be read a Second time.
The purpose of the amendment is somewhat technical, and I have had some correspondence about it with the Financial Secretary. It is a matter that much concerns those who operate holiday flatlets in seaside resorts and, indeed, in all resort areas of the country.
Confusion seems to have arisen about how the income from these holidays lettings should be taxed. The intention of the new clause is to tax that income as a realisation of profit and for the operation to be treated as carrying on a trade or, as the case may be, part of a trade, and the profits gained therefrom taxed under class 1 of schedule D.
If the new clause were not accepted, these profits could be taxed as investment income, and that would have a drastic effect on the running of these holiday flatlets, which are now very much part of life in our resorts. I have tabled the new clause to obtain clarification and in the hope that my right hon. Friend will tell us that the profits should be taxed under class 1 of schedule D and not as investment income.

Mr. Ridley: I am grateful to my hon. Friend for giving me the opportunity to set out briefly the law as I think it is now, and then to say a word about the Government's intentions.
There is no doubt that the holiday lettings that my hon. Friend has in mind are probably taxable under case 6, and that the income would attract investment income surcharge, as long as the services provided to the tenants are not on such a scale as to turn the nature of the operation into a trade. There are probably many instances, on the strict interpretation of the law, and the people concerned are not trading. My hon. Friend the Member for Bridlington (Mr. Townend), who has been assiduous in these matters, brought to our attention a recent case which suggested to him that somehow the law was changed by that case. A more likely interpretation is that the Revenue's view of the law was merely confirmed by that case. It is difficult to draw the line, both for taxpayers and tax inspectors.
My right hon. and learned Friend and I have been considering the matter with great care. We have decided, as a result of the strong and persuasive representations by my hon. Friends, to change the law in the way that they want. At a suitable opportunity we intend to bring forward proposals to change the law so that those carrying on a business of furnished holiday lettings will, in general, be able to claim capital gains tax retirement relief and relief


on replacement of business assets, and to have their income from such a business treated as earned income, whether or not they are carrying on a trade.
I regret that it is not possible to bring the new clause into effect in the Bill, but the Committee will know the reason why that is so. The Bill's life is not likely to be as long as it should be before it becomes an Act, when the necessary complicated, technical drafting could be done. The Government are putting forward a complicated proposition. I regret to have to inform my hon. Friend that, perfect though his intentions are, his draftsmanship is not quite perfect. I am afraid that we shall have to return to this matter and put it right at a later opportunity. I am grateful to all my hon. Friends who brought the matter to the Government's attention. I hope that my announcement will be of comfort to them and to those whom they represent, who have been living in uncertainty about the law and the future.

Mr. Norman Miscampbell: In putting my name to the new clause I was responding to the considerable worry felt in my constituency and the contiguous constituency by those who are running the holiday business of self-catering flats, which is perhaps the business that is expanding most. In many cases a great deal of assistance is provided, but there is still a fear that the profits will be taxed as investment, with all the natural disadvantages of such a tax imposition.
We understand that it is not possible to make a change in the Bill. It may take a little while before there is a properly drafted clause. We knew as well as anybody else that the clause would not do. It was not our purpose to pass the new clause. Our purpose was to elicit a response from the Minister. What a generous response we have had.
When many hard-working people in charge of prosperous little businesses find out what has happened in Committee today, they will be pleased and will welcome the Minister's words. It is not often, when a new clause is moved, that the Minister says that the Government will change the law in the way set out. I welcome that. If the law is changed the way we want, many people in Blackpool will be delighted. I extend my congratulations and thanks to the Government for what they have done. We fully understand why there must be a delay.

Sir Walter Clegg: I thank my right hon. Friend for the attitude that he has taken. In view of his reply and with the consent of the Committee, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Sir William Clark: New clause 10, entitled "Rate of development land tax," is a most important new clause, but I fully realise, as I am sure my hon. Friends do, that at this late stage it is extremely difficult to pass all the proposals on the Finance Bill because Parliament must dissolve on Friday. However, this matter is possibly inhibiting development in industry. I hope that in the next Finance Bill it will not be forgotten that the new clause was called for debate, but the debate did not happen. If my hon. Friends and I put down a similar new clause in the next Finance Bill, I trust that it will have sympathetic consideration from those who select the new clauses to be debated. In those circumstances, I shall not move the new clause.

New clause 12

CAPITAL ALLOWANCES: COMMERCIAL BUILDINGS AND STRUCTURES

`(1) Subject to provisions of subsection (5) below, where—

(a) any person is, at the end of a chargeable period or its basis period, entitled to an interest in a building or structure, and
(b) at the end of the said chargeable period or its basis period the building or structure is a commercial building or structure, and
(c) that interest is the relevant interest in relation to the capital expenditure incurred on the construction of that building or structure.

an allowance (herein referred to as a "writing-down allowance") shall be made to him for the said chargeable period.
(2) The writing-down allowance shall be equal to one-fiftieth of the expenditure mentioned in subsection (1)(c) above:
Provided that no writing-down allowance shall be made for a chargeable period beginning after the period of fifty years commencing with the time when the building or structure was first used.
(3) In this section "commercial building or structure" means a building or structure in use for the purposes of a trade, profession, vocation, office or employment, being neither an industrial building or structure nor a qualifying hotel.
(4) The Tax Acts shall have effect as if this section were contained in Chapter I of Part I of the Capital Allowance Act 1968.
(5) This section has effect in relation to expenditure incurred after 9th May 1983 and to expenditure which by virtue of section 5(1) of the said Act of 1968 (purchase of unused buildings or structures) is deemed to have been incurred after that date; but expenditure shall not be treated for the purposes of this section as having been incurred by reason only of section 1(6) of that Act (expenditure incurred before trade begins): .—[Mr. Viggers.]

Brought up, and read the First time.

Mr. Viggers: I beg to move, That the clause be read a Second time.
The selection of the new clause allows me to remind my right hon. and hon. Friends that the basis for capital allowances for buildings was set as long ago as 1945, when it was decided that industrial buildings should be eligible for capital allowances and that commercial buildings should not be eligible. A change was made in 1978, when hotels were made eligible for capital allowances. Lord Radcliffe's committee suggested that commercial buildings should also be eligible. I ask my hon. Friend the Minister to say that the Government will remain flexible in their thinking in this important area.

Mr. Wakeham: It is generally accepted that in principle there is a case for extending capital allowances to commercial buildings on the strength of the argument recognised in the Government's recent Green Paper on corporation tax. The main problem is cost. I appreciate that my hon. Friend's new clause would not cost much in the initial years, but it would build up to a substantial cost. In the responses to the Green Paper there was no general consensus about the future of the capital allowances system. Many representations were in favour of capital allowances for commercial buildings. But the Government looked for any restructuring to be on a revenue-neutral basis and there was little outside support for the reduction in other allowances to pay for the new allowance. The practical need for capital allowances for commercial buildings is in some ways less clear-cut than for other assets. Commercial buildings wear out slowly and, far from losing value, many increase in value substantially.


My hon. Friend will know that this is one of the things that the Government will keep constantly in mind. I do not recommend his new clause to the Committee.

Mr. Viggers: I am grateful to my hon. Friend for his helpful remarks. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Schedules I to 5 agreed to. Schedules 6 to 9 disagreed to.

Schedule 10 agreed to.

Schedule 12 agreed to.

Schedules 13 to 17 disagreed to.

Schedule 18 agreed to.

Schedule 19

REPEALS

Amendments made: No. 57, in page 162, line 4, leave out from beginning to end of line 11.

Manuscript amendment: in page 162, leave out lines 15 and 16.

Manuscript amendment: in page 162, column 3, leave out lines 17 to 19.

No. 54, in page 162, leave out lines 37 to 41.

No. 58, in page 163, line 1, leave out Part III.

No. 55, in page 164, column 3, leave out lines 4 to 7.

No. 59, in page 164, line 23, leave out Part V.

No. 56, in page 164, leave out lines 15 to 22 and insert—

'1982 c. 39.
The Finance Act 1982.
In Schedule 19, in paragraph 1(3) the word "nine".'. — [Mr. Wakeham.]

Schedule 19, as amended, agreed to.

Bill reported, with amendments; as amended, considered.

Clause 12

CHARGE OF INCOME TAX FOR 1983–84

Mr. Robert Sheldon: I beg to move, as a manuscript amendment, in page 8, line 13, leave out '£14,600' and insert '£12,800'.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this, it will be convenient to take the other manuscript amendments:

In page 8, line 13, leave out '£14,600' and insert `£12,800'.
In page 8, line 16, leave out '£7,100' and insert `£6,250'.
In page 8, line 19, leave out '£14,600' and insert `£12,800'.
In page 8, line 20, leave out '£2,600' and insert '£2,300'.
In page 8, line 21, leave out '£4,600' and insert '£4,000'.
In page 8, line 22, leave out '£7,100' and insert '£6,200'.
In page 8, line 23, leave out '£7,100' and insert `£6,200'.

In page 8, line 24, at end insert—
'(1A) Nothing in this section requires any change to be made in the amounts deductible or repayable under section 204 of the Taxes Act (pay as you earn) before 31st August 1983.

(1B) Notwithstanding anything in the preceding provisions of this section, the amounts deductible or repayable under section 204 of the Taxes Act on and after 11th May 1983 and before 31st August 1983 may be such as would be requisite to give effect to the provisions as to higher rate tax and the investment income surcharge contained in a Resolution passed by the House of Commons on 21st March 1983.'

Mr. Sheldon: These amendments would increase revenue by about £300 million which could be used in many beneficial ways. The money will be taken from those who have been well treated in the past four Budgets. It had been intended to continue that treatment in this Budget. The Opposition are saying, through these amendments, that those advantages are coming to an end and that those people will now pay their fair share of tax.
My hon. Friend the Member for Edinburgh, Central (Mr. Cook) reminded us in Committee that those people are earning in excess of £17,000 a year, when one takes personal allowances into account, up to and beyond the highest income tax band which is in excess of £33,000 a year, plus personal allowances. We are therefore dealing with people who earn substantial incomes and saying that they should not be treated so favourably, bearing in mind the consideration that they have received in previous Finance Bills.
The concession that such people were given on capital transfer tax of about another £50 million, the concession on investment income surcharge of about £25 million and the concession of £10 million on capital gains tax amount to about £300 million. Those people represent less than 5 per cent. of the population. They have obtained tax advantages under this Government and should be compared with the 95 per cent. who have been disadvantaged in several ways given the proportion of income that they must pay in tax. Tables that express that have been a constant feature of the Official Report for the past few months. They show how people earning three quarters and one and a half times average earnings, for example, are faring. Thus we have been able to see how much the well-off have benefited and how badly the less-well-off have been treated.
These measures are not what we should like them to be by a long way, but they are those that are available to us now to put matters right. They are not vindictive which, the Chief Secretary to the Treasury has so frequently said. It is not vindictive to say that the times of ever reducing taxation for the well-to-do and ever increasing taxation of the less-well-off are coming to an end. These amendments are a signal that that time has now come.

Mr. Brittan: In moving his manuscript amendments, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) has given a wholly distorted picture of the Budget's impact. He has expressed his views without attempting to mention the fact that the Budget would have increased by 14 per cent. the tax threshold at the basic rate. To fail to mention that and to talk only about the redress of the comparative burden is a gross distortion. This amendment will hold the threshold at which people begin to pay the higher rate of tax and the investment income surcharge threshold to the 1982–83 levels rather than increase them by the 14 per cent. that we proposed to increase all the levels. It is, therefore, quite right to say that what the right hon. Gentleman has proposed is mean, vindictive, petty and entirely in accordance with the approach that has been adopted in the discussions about what parts of the Bill should go through. The only reason


for accepting what the right hon. Gentleman proposes is the parliamentary circumstances which make it necessary to get the Bill through. However, for reasons that I shall explain, the amendment is not only mean and petty; it is nugatory.
7.30 pm
I undertake that as soon as the Conservatives are returned to office in June we shall introduce a new Finance Bill to reinstate the provisions that we advanced for this clause and others with which I shall deal later. The effect on the taxpayer will be as though the amendment had never been carried, because not only will it have no effect after a new Finance Bill is introduced but it will have no effect in the interim.
Although the amendment is irrelevant, it will be highly instructive to hon. Members, especially to Labour Members, and their constituents if I point out what it would entail. If the amendment had a permanent impact, it would mean that people would be liable to higher rates of tax once their taxable income was more than £12,800 instead of the £14,600 that we propose. About 300,000 taxpayers will be pulled into higher rates of tax and to the marginal rate of 40 per cent. Many others higher up the income scale will be pulled into even higher marginal rates.
A cursory glance at the figures shows that we are not talking about the rich people whom Labour Members deride. With a threshold of £12,800, and assuming no relief other than the basic personal allowance, a two-earner couple would pay a higher rate of tax when their joint income was less than twice the average male earnings. A single person would pay higher rate tax at less than one and two thirds average male earnings. We are talking not about the millionaires and billionaires of the Opposition's imagination, but mostly about middle managers and professional people making their way in business—those who are essential to ensuring growth and the creation of wealth, prosperity and jobs.

Mr. Cook: The Chief Secretary will not wish to mislead the House or the country about the impact of the measures. He is fully aware, because he has seen the figures in Hansard and heard the figures that we gave in Committee, that the effect of the amendments will be to extend the higher rates to 4 per cent. of all taxpayers as opposed to the 3 per cent. to whom it would have been confined had the clause as originally drafted been passed. We are talking about the 4 per cent. of taxpayers who are well paid and not the other 96 per cent. of the taxpaying public.

Mr. Brittan: The hon. Gentleman's remarks do not contradict what I said. I stated the figure precisely. Anyone who has heard the figures for actual income and for the relationship with average male earnings knows that I am right to say that middle managers and professional people will be adversely affected by the mean-mindedness of the Opposition. The nervousness with which the hon. Gentleman responded to the point shows that Labour Members are already beginning to doubt their political wisdom in insisting on the amendments.
There is no question of special treatment for the rich, as the right hon. Member for Ashton-under-Lyne had the effrontery to suggest. Our proposal was for a uniform 14 per cent. increase across the board. That is what will happen to personal allowances, a provision that the

Opposition are wise enough not to challenge. It is what we proposed for higher rate taxpayers, and there is no question of us wishing to treat them more favourably than other taxpayers. Our sense of fairness is such that there is equally no good reason to treat them less favourably.
What about the point at which people are liable to the 15 per cent. investment income surcharge? The effect of the amendment is to leave that at £6,250 compared with our proposal of an increase to £7,100. No one should pretend, with those figures, that we are talking about preventing the rich from enjoying the huge rewards of unearned income. If the amendment were to take effect, 45,000 more people would be liable to investment income surcharge, many of whom will be pensioners and widowers who have worked hard all their lives and invested prudently for their retirement. The Opposition seek to extract a penalty from them to satisfy their pique in the last few days of this Parliament.
All the groups that are liable under the proposals to the higher rates of tax should take note of what a Labour Government would mean for them if they had the power to do what they wish. They should also take note of another interesting point that might otherwise escape their attention. Although, for the reasons that I have explained, it is wrong to provide for increases of less than 14 per cent., it would have been easier to understand the Opposition's attitude if they had proposed that the high rate thresholds should be indexed, or increased by about 5.4 per cent., which was the rate of inflation in the year up to December 1982, and which is the relevant figure for the so-called Rooker-Wise increases. That compares with the 14 per cent. that we gave on the basic allowances. The Opposition could have argued that that was a natural and neutral proposal, but their pettiness and mean-mindedness is such that they will not even concede that. They want an increase in the burden of tax on middle management and others—

Mr. Straw: rose—

Mr. Brittan: The hon. Gentleman must contain himself. I hope that he can produce a better point than did the hon. Member for Edinburgh, Central (Mr. Cook). It is fantastic that Labour Members are not prepared to allow ordinary indexation, let alone an increase of 14 per cent.

Mr. Straw: Does the Chief Secretary accept that since the beginning of the Government the burden of high rates ha, more than kept pace with inflation? It is much lower in real terms than it was in 1978–79, and, despite the cancellation of the increases in this Budget, those on higher incomes are still doing better than they were in 1978–79, whereas those on lower incomes are faring much worse.

Mr. Brittan: The burden on those with higher incomes in 1978–79 was crippling initiative and driving people away from Britain. I make no apology for the actions of my right hon. and learned Friend the Chancellor in his first Budget. The hon. Member for Blackburn (Mr. Straw) might wish to bear in mind that in 1981, when fiscal prudence required us to reduce the public sector borrowing requirement, to increase taxes and not to increase allowances, all taxpayers were treated in the same way. There was no increase in allowances at any level. The proposal in this Budget was to do exactly the same in a year in which we could improve the position of taxpayers.
I assure taxpayers that under the arrangements already made their employers will apply the new codings resulting from the Budget, which allow for the 14 per cent. increase. By sheer coincidence, those new codings come into effect today, and they will continue to apply until August. If a Labour Government were elected in the meantime and the provisions in this amendment were to stand, arrangements would no doubt be made for the necessary amount to be clawed back from the taxpayer. However, a Conservative Government are pledged to reinstate at the earliest opportunity the provisions that we originally made. The effect will be that the present codings will continue beyond August, and for the taxpayer this amendment will be irrelevant and will not harm him.
This petty, nasty amendment will be relegated to a minor footnote of fiscal history showing only the spiteful meanness exerted by the Labour Party in the dying days of this Parliament.

Mr. Robert Sheldon: The Chief Secretary said that he will reinstate this proposal in another Finance Bill. It is a pity that he did not make this clear earlier because we could have dropped this Finance Bill and dealt with all those matters in another Bill. However, he seemed reluctant to do that when he realised that this Parliament was coming to an end. That might have been the sensible way to proceed, but I note his second thoughts on the matter.
As to the investment income surcharge, we should remember that the £7,100 mentioned in the clause presupposes a capital sum of about £70,000. We are talking not about people of modest means, but about people of reasonable means. They are affluent enough to pay the amounts of tax that we believe are right, bearing in mind that they may have other incomes.
The right hon. and learned Gentleman said that at the very least we should have indexed on the Rooker-Wise principle. He has failed to take account of what happened as a result of the previous four Finance Bills. We are merely saying that in the Government's fifth Finance Bill the same sort of assistance should not be provided. The Minister talked about removing the burden of the higher rates of tax, which he claimed were crippling industry. Surely industry has been crippled over the past four years. The withdrawal of the higher rates of tax seems to have done no good at all. If there is the relationship that the right hon. and learned Gentleman claims, it must be sinister and evil and capable of producing great dangers for our economy.
We are concerned about the way in which the tax concessions have been made as a matter of high principle. We know that the Government have carefully nursed and cosseted their friends. We argue that the burden of taxation must be decided on principles that are much fairer and more sensible than those that have been adopted by the Government. More thought must be given to the future growth of the economy than is reflected in the Government's principles. The principles that we have introduced, which have been operated in the past and which have been in abeyance over the past four years, will have an influence in the Finance Bills that are introduced by the next Labour Government.

Amendment agreed to.

Manuscript amendments made: In page 8, line 16, clause 12, leave out `£7,100' and insert `£6,250'.

In page 8, line 19, leave out '£14,600' and insert `£12,800'.

In page 8, line 20, leave out `£2,600' and insert `£2,300'.

In page 8, line 21, leave out `£4,600' and insert `£4,000'.

In page 8, line 22, leave out `£7,100' and insert `£6,200'.

In page 8, line 23, leave out `£7,100' and insert `£6,200'.

In page 8, line 24, at end insert—
'(1A) Nothing in this section requires any change to be made in the amounts deductible or repayable under section 204 of the Taxes Act (pay as you earn) before 31st August 1983.
(1B) Notwithstanding anything in the preceding provisions of this section, the amounts deductible or repayable under section 204 of the Taxes Act on and after 11th May 1983 and before 31st August 1983 may be such as would be requisite to give effect to the provisions as to higher rate tax and the investment income surcharge contained in a Resolution passed by the House of Commons on 21st March 1983.'—[Mr. Robert Sheldon.]

Clause 63

REDUCTION OF TAX

Manuscript amendment proposed, in page 52, line 33, leave out Clause 63.—[Mr. Robert Sheldon.]

The Chairman: With this it will be convenient to discuss the consequential manuscript amendment, in clause 98, page 79, line 18, leave out from beginning to end of line 19.

Mr. Brittan: This is another so-called concession that has been extracted by the Opposition in the dying days of this Parliament. It is even more futile than those that have preceded it because I suspect that it does not achieve that which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) wished. I hasten to add that I would never have agreed to it were it not for the circumstances in which we find ourselves today.
Clause 63, which is to be deleted, would have increased the threshold for capital transfer tax from £55,000 to £60,000 and widened the chargeable bands slightly beyond indexation. The right hon. Gentleman's insistence on the deletion is another example of the Opposition's small-mindedness. Fortunately, whether by accident or design, the damage will be less than if the income tax change had survived the election. The threshold and rates will now become those for last year but increased to take account of price changes over the year to last December. In other words, they will still be indexed. Unlike income tax considerations, legislation provides for indexation in the absence of any specific provision. If the specific provision that would have given somewhat more than indexation is removed, the result is indexation. The grand total of all the Opposition's huffing and puffing is that instead of the threshold increasing to £60,000 from £55,000 it will increase to £58,000. I hope that they will find that something exciting to crow over.
The index scales are set out in full in the capital transfer tax indexation order. The rate bands are far less sensible than those that my right hon. and learned Friend the Chancellor of the Exchequer proposed and contain some curious figures. However, if that is the result that the Opposition want, that is what they will have. Is for those


reasons that I regard the amendment as a damp squib of a concession. It is appropriate that the Opposition should conclude their faltering efforts on the Bill upon it.

Mr. Robert Sheldon: The right hon. and learned Gentleman can hardly say that the Opposition have huffed and puffed, as the amendment was moved formally. The right hon. and learned Gentleman knows that there would have to have been rather complicated amendments to achieve a better result. We thought it right to show our opposition to the proposed increase in the benefits that were to be obtained by means of the clause. We opposed the clause originally and we continued to do so. I know that the right hon. and learned Gentleman will accept the amendment in the same generous spirit in which he has accepted the others.

Amendment agreed to.

Clause 98

SHORT TITLE, INTERPRETATION, CONSTRUCTION AND REPEALS

Manuscript amendment made: In page 79, line 18, leave out from beginning to end of line 19.—[Mr. Robert Sheldon.]

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Health and Social Services and Social Security Adjudications Bill [Lords]

As amended (in the Standing Committee), considered.

The Minister for Health (Mr. Kenneth Clarke): I beg to move,
That the Bill be considered in the following order, namely, Clauses 1 to 6, Schedule I, Clauses 7 to 9, Schedule 2, Clause 10, Schedule 3, Clause 11, Schedule 4, Clause 12, Schedule 5, Clauses 13 and 14, Schedules 6 and 7, Clauses 15 to 25, Schedule 8, Clauses 26 to 29, Schedule 9, Clause 30, Schedule 10, and Clauses 31 to 34.
The motion merely proposes that the schedules be taken after the clauses to which they relate. This will be similar to the order that we followed in Committee. I think that the proposed procedure will enable the House to have a more orderly debate.

Question put and agreed to.

Clause 1

APPOINTMENT AND STATUS OF COMPTROLLER AND AUDITOR GENERAL

Mr. Kenneth Clarke: I beg to move amendment No. 1, in page 2, line 43, after '1957', insert
`towards expenditure incurred or to be incurred by them'.
This is a drafting amendment to an important part of the Bill which improves the rules on the joint finance of social services provision by means of health authority moneys. This is a part of the Bill that was generally welcomed when the Government brought forward their proposals. Last year we launched our "care in the community" initiative to enable health authorities, local authorities and voluntary societies to make the best provision for the patients and clients in their care. It is our belief that there are still too many elderly and frail people who are staying for long periods in hospital wards when they would prefer to be cared for either in their own homes or near to them. We believe that it would be of benefit to the hospitals to be able to transfer those patients and to free beds for those awaiting hospital treatment. It would be of especial benefit to the patients themselves, and their relatives and friends, if more suitable provision were made available near their homes.
The Government's policy involves giving health authorities an entirely new power to move resources with patients so that they can give long-term financial assistance to local authorities or voluntary societies to provide community care for a patient who moves out of hospital.
We are building on the long-standing joint finance arrangements whereby, by agreement, a health authority and a local authority social service department or a health authority and a voluntary body can agree to use so-called joint finance moneys for the capital development of a new community care scheme, or to provide the revenue cost of a community care scheme that will either look after those who have moved out of long-stay hospital wards to be nearer their family and friends or look after those who would otherwise have had to be admitted to hospital because it was not possible to care for them properly outside.
The amendments and improvements that we made to the joint finance provisions were in addition to the


provision of extra resources. The last increase in joint finance moneys was announced in July last year, and an extra £6 million was put into the pool. I will not give the House all the figures at this stage in the Parliament, but the Government's record on joint finance has been excellent. We have increased joint finance funds by 51 per cent. compared with the funds being expended when we took over from the previous Labour Government four years ago.
There were defects in the rules, apart from the lack of resources in the joint finance pool. At the moment, it is not legal to incur expenditure using joint finance moneys on any project that has an educational or housing content and that unnecessarily inhibits the schemes that could qualify for help because, when one is dealing with better provision for mentally handicapped children, one needs to have a look at the education provisions that one might require. For many elderly, frail or ill people, sheltered housing can be a far better environment than a hospital ward, so a housing content had to be introduced as well.
Unfortunately, when drafting this provision, which enables joint finance money to be expended on schemes that have a housing content, a small drafting error was made and amendment No. 1 is to correct that. When the Bill was drafted the words
towards expenditure incurred or to be incurred by them
were inadvertently omitted from paragraph (d) of clause 1 and the other four similar paragraphs in subsection (2) do contain them. If we did not amend the Bill it would mean that there might be technical difficulties occasionally in providing for funds for schemes with a housing content, which everyone wants to be assisted. I therefore commend it to the House as putting right a last minor defect in a policy that has otherwise been widely welcomed and which it will be necessary for the Conservative Government to press on with and improve further once we are returned to office.

Amendment agreed to.

Schedule 1

ACCESS TO CHILDREN IN CARE—ENGLAND AND WALES

The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): I beg to move amendment No. 10, in page 34, leave out lines 33 to 41 and insert—
`12B. — (1) A local authority may not terminate arrangements for access to a child to whom this Part of this Act applies by its parent, guardian or custodian, or refuse to make such arrangements unless they have first given the parent, guardian or custodian notice of termination or refusal in a form prescribed by order made by the Secretary of State.
(1A) A notice under this section shall contain a statement that the parent, guardian or custodian has a right to apply to a court for an order under section 12C below.
(1B) A notice terminating access shall state that access will be terminated as from the date of service of the notice.
(1C) A local authority are not to be taken to terminate access for the purposes of this section in a case where they propose to substitute new arrangements for access for existing arrangements.
(1D) A local authority are not to be taken to refuse to make arrangements for access for the purposes of this section in a case where they postpone access for such reasonable period as appears to them to be necessary to enable them to consider what arrangement for access (if any) are to be made.'.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take Government amendments Nos. 2 and 29.

Mr. Newton: It may be helpful if at the outset I explain to the House that the two amendments with which this amendment is linked refer to the position in Scotland, whereas amendment No. 10 refers only to the position in England and Wales. Although they are in some respects parallel amendments, and amendment No. 29 follows on something that was done in Committee, it may be for the convenience of the House if my hon. Friend the Under-Secretary of State for Scotland with responsibility for health and social work also explains to the House the Scottish provisions. Therefore, I shall address myself primarily to amendment No. 10 and give some background to the amendments, which amend a fairly limited but important point concerning the access rights of parents to children who are in local authority care.
The broader background is a change that was introduced in the Bill in Committee, to which this is now a further amendment, which responded in a sensible and practical way to the widespread concern that has, as I sure the House will be aware, been expressed in recent months, and perhaps over a longer period than that. The worry is about the possible position of parents when their children are in local authority care and when the local authority therefore has responsibility for taking decisions concerning those children. I refer to the position when it may feel constrained to decide at some stage that the natural parents are to have no further access to the child.
I acknowledge, as I think that everyone concerned about this matter would, that there may be circumstances in which local authorities are necessarily driven to take such a decision. Nevertheless, it is an important decision and one that clearly implies the permanent disruption of the original family. Even where it is believed by the local authority or others that this is in the long-term interests of the child in question, it is not a decision that should be taken lightly or without careful consideration.
Over the recent past, and more particularly in the course of the past year and the early part of this year, and against this background, there has understandably been considerable pressure from bodies such as the children's legal centre and the family rights group and from other concerned bodies and individuals that the present relatively untrammelled rights of local authorities to take such decisions should be rather more closely restricted by the law and governed by the possibility of judicial review by the courts.
In response to that, the hon. Member for Ormskirk (Mr. Kilroy-Silk), who has taken a close interest in these matters, although he is clearly not able to be here tonight, first introduced private Member's Bills, and subsequently tabled a new clause to this Bill, virtually incorporating one of his private Member's Bills, which would ensure that virtually all, or most, local authority decisions about access to children in care would be subject to possible right of appeal to the courts.
My hon. and learned Friend the Minister and I, in considering these problems, came fairly rapidly to the conclusion that it was right — I would argue almost unanswerably right—to do something to strengthen the rights of parents in this regard. That is what we have done in the Bill. We also felt that at a time when the House of Commons Select Committee on Social Services had set its


hand to an important study on child care issues, it would be wrong to go to the full extent argued from some quarters in granting rights of appeal on almost all access decisions. It would also be wrong to go too far in altering the balance within the existing law between the rights, duties and responsibilities of parents and the rights, duties and responsibilities of local authorities, and the rights and the interests of children without more careful consideration, study and, above all, without waiting for the report of the Select Committee. We did not feel it right to go quite as far as was being urged and as many people still feel it would be right, in due course, to go.
At the moment, amendment No. 10 introduces a relatively limited but practical move, which we do not necessarily see as the last word on the matter, but which we see as the appropriate step to take at a time when so much wider thought about child care issues is going on. We introduced a new clause giving parents the right of appeal to the courts in certain circumstances—not where the local authority makes any restrictive decision about access but where the local authority decides to terminate access — in other words, where some final act is proposed to cut off the link between the child and the parents. That has been widely welcomed even by those who wish that we had gone further. It is recognised that it is a significant practical step that represents an important improvement in the rights of parents.

Mr. Stephen Dorrell: Does my hon. Friend accept that the matter to which the amendment is addressed has been a consistent long-term concern of many who are involved with child care issues? I am sure that my hon. Friend has had a number of cases brought to his attention as a constituency Member of Parliament, as I have had as the Member of Parliament for Loughborough. The concern that has been expressed about the rights of parents to appeal against the final denial of access to children in care has been to some extent answered by the Government's attitude to the amendment. At the moment of final break between the natural parents and the child there is inevitably great emotional upset within the family. The parents, almost inevitably, regard the local authority as a party to that dispute, and it is equally inevitable that the parents will not accept the local authority as the final arbiter on the issue. In those circumstances, it is important that a right of appeal should exist to the courts, which are seen as quite independent and apart from the dispute, and their impartiality is respected by most parents, even by those who are deeply emotionally involved in that difficult position.

8 pm

Mr. Newton: I am grateful to my hon. Friend who has stated the case clearly. From my correspondence with him in my role as a Minister and in his capacity as the hon. Member for Loughborough, I know that he does an excellent job for his constituents and I appreciate his involvement in these matters. I am glad that progress has been made in this direction.

Mr. Nigel Forman: Will my hon. Friend enlighten the House as to some of the circumstances in which a local authority takes painful and drastic action of this type which is often misunderstood by parents? I have encountered such cases that have caused great anguish to the parents. It is not always easy for them to understand

exactly the reasons why local authorities act as they do. I associate myself with my hon. Friend the Under-Secretary of State in saying such a provision is a necessary addition to the law. I welcome the provision, but I would appreciate further explanation.

Mr. Newton: My hon. Friend the Member for Carshalton (Mr. Forman) has given me the opportunity to expand at length on the unhappy circumstances that may lead to children being taken into care. It is done by means of several legal provisions. Depending on how they are counted, there are as many as a dozen ways. Children are taken into care because they have committed or are thought to have committed a criminal offence or where parents may be dead or have abandoned the child. In those circumstances, the issue of parental access would not arise.
Many examples exist, varying from temporary family difficulties to mental handicaps or other disabilities on the part of the parents, which may have led either voluntarily in the first instance, or by a care order, to a child being taken into care.
Just as the circumstances by which children are taken into care are wide ranging, so are the circumstances in which local authorities may find themselves after that action has been taken. The problem is a matter for local authority social services departments, and their policies vary considerably. I trust that at best no local authority would come to such a decision until there was no possibility of the child being successfully reunited with its family to regain a stable future in the normal and natural family context. I would be wrong in attempting to elaborate at the Dispatch Box tonight on the circumstances that might lead a local authority to come to such a judgment.
I trust that my hon. Friend the Member for Carshalton, even if he does not agree with all the judgments that are made, accepts the general proposition that there may be circumstances in which it is in the child's interests for it to be taken into care. For example, a local authority might decide that adoption is the only practicable way to ensure the child a secure future. As part of that decision, it might decide that access by the natural parent should be ended. Such problems are spoken about as if the only factor is of hard-hearted local authorities telling parents with children in care that they cannot see their children again. That is a last resort. For the large majority of children in care who do not have any contact with their parents, the reason is that their parents no longer seek contact with them. It is not that some form of bureaucratic action is denying them access. In some respects, those are the children for whom sorrow should be felt.

Mr. Dorrell: My hon. Friend said that he did not regard this restricted acceptance of the principle espoused by the hon. Member for Ormskirk (Mr. Kilroy-Silk) as being the last word on the issue. Assuming that the Government are returned to office on 9 June, how does he expect that issue to develop, because many cases are not covered by the amendment and many parents would like to be informed of the Government's long-term attitude?

Mr. Newton: I am, again, grateful to my hon. Friend the Member for Loughborough. I do not wish to elaborate too much on what I said about this not necessarily being the last word. I stated my views on this subject in Committee and when giving oral evidence to the Social


Services Committee on children in care. Its report must be considered in a wide and systematic way. I do not wish to predict whether further steps should be taken or what those steps should be. I said in Committee that the step that the Government are taking is right and important, and could conceivably be the only step that is needed. I do not rule out further steps in the light of the reports that are expected and the subsequent development of opinions. The Government restricted their proposals to cases where local authorities terminated the parents' access to children in care only because there was no halfway house between that and the position in which parents would have the right to appeal to the courts about every decision involving access to children in care, even if it was said that the parents could see their children only once a day for half an hour. That, theoretically, would be a restriction on access.
The Government came to the conclusion that there was no halfway house between the complete right of appeal to the courts about access and the more limited proposal that I have mentioned. Although some people wish the Government to go as far as having a right of appeal in every case of dispute, such a provision would involve a major change in the present balance of the law and the nature of the responsibility that has been placed on local authorities in contrast with those powers that have been given to the courts. The Government did not feel that it would be appropriate to make such a change hastily without widespread consultation and discussion. That type of thinking led the Government to make their proposal. Although the Government felt they could not make such a fundamental change — and I include my hon. and learned Friend the Minister for Health in what I say—the conclusion was reached that something had to be done to deal with those cases where access was being terminated altogether.
Whatever provisions become law, whatever the problems that concern parents, local authorities and other bodies, in the end, good social work practice and sensible, proper and humane procedures for dealing with the relationship between local authorities, which have the responsibility for the child in care and the parents, will be more important than any other factor in bringing about the improvements that are needed.
I do not believe that the law can regulate every last dot and comma of those relationships. Along with the legal rights that I have mentioned, we have inserted into the proposal an equally, or perhaps even more important, provision for what has been called a statutory code of practice governing access to children in care. We are incorporating into the Bill a statutory duty to be laid on the Secretary of State for Social Services to produce a code that will guide the work of local authorities when dealing with this issue. We shall work hard on that during the next few months. We shall, of course, consult the local authorities and consult widely among the other bodies involved. Ultimately that may prove to be even more important than the new legal right. In combination they are of greater significance than is sometimes appreciated, and are very important.
Having given the background to the proposal, I shall deal with the amendment. As a result of our deliberations in Committee, and in the continued examination of the Bill by Ministers and officials, it emerged that in providing the new right of appeal on the termination of access to parents

we had not incorporated any provision to cover parents whose access is terminated, by act or by omission, before the law comes into effect. Amendment No. 10 seeks to remedy that and to meet the concern expressed about the position of parents, guardians or custodians whose access to the children may have been lost before commencement of the new access provisions.
As I have said, amendment No. 2 covers Scotland, while amendment No. 10 concerns England and Wales. The relevant subsections, subsections 17A and 12B, are now formulated so that there is no doubt that they clearly cover the position of parents who have no access, and may not have had access for some time, but who now wish at some point after commencement to see their children. Where a local authority is asked for access by a parent in that situation, the authority will consider whether it can offer access arrangements, and if it has to decide that the parents should have no access at all it will be required to issue a notice of refusal of access.
At that point, by the issue of a notice of refusal, the parent will gain the right to apply to the court for an access order under the other provisions. It is clear why such changes have been necessary. One cannot speak of termination of access in cases where there has been no access, but the two additional subsections in the Scottish measure and the provisions that I am dealing with covering England and Wales clarify what is meant by termination and refusal, so that there is no doubt that what is meant is a final decision to end access altogether, or to prohibit it altogether.
Those are the decisions that the clause, as amended, would give the parents the right to challenge in court.

Mr. Dorrell: I am grateful to my hon. Friend for his patience. Perhaps he could say a little about the factors that the court will take into account when reaching this decision. Clearly, there are two different sets of circumstances. A parent may be refused access to his child for the first time or, alternatively, he may be seeking to regain access to a child that he has not seen for some time. Will the court apply the same criteria to both sets of circumstances? After all, they are very different. Will the statutory code drawn up by the Secretary of State apply equally to both sets of circumstances, even though the decision denying access to the parent may have been taken long before the code of practice was thought of? What criteria will the court use in reaching its decision?

Mr. Newton: The code will be primarily concerned with decisions about access that are taken from now on by local authorities and not least with how that decision-making process should be conducted within the authority, how far councillors should be involved, how the subject should be communicated to the parents and what rights of discussion and representation parents should have, long before they may wish to go to court.
Clearly, no one would want the parents to be forced to go to court simply to obtain a debate with the local authority. I am not saying that that happens, but then one would not want that to happen. Therefore, part of our thinking is that, given that there is no doubt some difference of practice between local authorities, we should raise the practice of all to the practice of the best and should include any new thoughts that arise from the wide-ranging consultations that we hope will take place this year.
I was asked about the factors that the court would take into account. I am not a lawyer, but I hesitate to ask my hon. and learned Friend the Minister for Health to bring his legal expertise to bear, or—[Interruption]—to call upon the equally readily available legal expertise of the hon. Member for Pontypridd (Mr. John). I think that I am right in saying that we have a solicitor on the one side of the Chamber and a barrister on the other. The mind boggles at their expertise and the dazzling debate that might follow.

Mr. Brynmor John: No contest.

Mr. Newton: I shall not ask the hon. Gentleman to elaborate on that remark, because I might be asked to arbitrate between my hon. and learned Friend and the hon. Gentleman or to guess who would emerge the winner. When it comes to solicitors versus banisters, the ordinary mortal does best to stay out of the argument. Therefore, I shall return hastily from that possible legal thicket to the question asked by my hon. Friend the Member for Loughborough about the factors that the court might take into account. I would not want to lay down what the court should take into account. but it would have to consider all the circumstances. The law generally requires—there are some rather strange differences in the provisions governing different parts of the law relating to child care —that the welfare and interests of the child are to be the paramount consideration. That is easier to put in terms than to define precisely, but the court will consider the matter with that primarily in mind.
It may be asked whether the amendment will not widen the intention of the original clause by introducing, in effect, a right to challenge refusal as well as termination of access. It will widen the original clause to include parents whose access has never been formally terminated by issue of a termination notice. It will also give them the right to be given formal notice of their position, and, if they are to be allowed no access at all in future, to challenge that decision. We believe that it would be wrong to exclude parents in that position and that the new clause should cover—as we hope that it now will do—all those parents who are deprived of any access. The original clause appeared to be defective in that respect, and when that was brought to our notice we readily agreed to put it right.
I hope that the House will agree as readily tonight to the broad purpose of which the amendment forms part, to give this new right to the parents of children in care who may have their access to their children terminated, and at the same time that the amendment is sensible and useful and strengthens still further the proposal we have already made to the House.

The Under-Secretary of State for Scotland (Mr. John MacKay): It gives me great pleasure to take part, even at this late stage, in the debate on this important Bill. Unfortunately, I was on a coincident Committee dealing with mental health legislation in Scotland at the same time as this Bill passed through Committee. I am delighted to hear that Opposition Members missed me. Unfortunately, I could not be there because the Mental Health (Amendment) (Scotland) Bill required my attention. I am delighted to say that the Bill completed its remaining stages last evening. I should like to thank my hon. Friends the Minister for Health and the Under-Secretary of State for Health and Social Security for looking after the

Scottish interest and my hon. and learned Friend the Solicitor-General for Scotland, who came in to add some of the legal words of wisdom which were necessary to keep the Committee on the right lines about Scottish law. With regard to the contest or battle between banisters and solicitors in England, the sending in of the Solicitor-General for Scotland, an advocate, to do the adjudication was a sensible move by the Government and the Scottish Office.
The new sections 17A to 17E in the Social Work (Scotland) Act 1968, inserted in Committee, will give parents whose parental rights have been assumed and whose access to their children has been terminated by the local authority a right to ask the sheriff to decide whether this is reasonable. The purpose of amendment No. 2 is to ensure that those whose access has been terminated in the past can also exercise this right, but also to ensure that such cases are not taken to court in circumstances where access is not actually refused or terminated. It is similar to, and has the same effect as, the amendment moved by my hon. Friend the Under-Secretary of State for Health and Social Security. In essence, it extends the right of recourse to a sheriff to a parent who is refused access. This means that, where a parent has had access terminated in the past and applies now for access, the local authority will have to give formal notice if it proposes to refuse to allow access.
There is, however, concern, as my hon. Friend has already mentioned with regard to England and Wales, that this may bring about court hearings in circumstances where a decision on access has not been made. 'The amendment therefore provides that a local authority should not be seen as terminating access where it is simply altering the arrangements and should not be seen as refusing to make arrangements for access where it is simply declining to allow access during a reasonable period when decisions are being taken on what access, if any, is appropriate.
Amendment No. 29 relates to the period for which the operation of an access order can be suspended by an emergency order made under the new section 17C. It reduces the period from 28 clays to seven days and simply parallels an amendment of the hon. Member for Ormskirk (Mr. Kilroy-Silk), which was accepted in Committee, to the English legislation.
Since the position on access to children in care in Scotland is similar to that in England, perhaps I may mention some of the differences that may be of interest. The new provision deals only with the situation where a local authority has assumed parental rights by means of a resolution under section 16 of the 1968 Act. This is the only Scottish child care provision which removes the title of a parent or guardian to sue for access in the courts. Supervision requirements from a children's hearing, unlike care orders in England, do not impinge formally on the parental rights and duties of the natural parent. There is, therefore, no need to make provision for other circumstances.
Equally, there is no need to specify further the court having jurisdiction, since this will be the sheriff court in Scotland. Similarly, there is no need for special provision on the rights of appeal, since under the normal provisions in Scotland a decision by the sheriff will be subject to review by the sheriff principal or in certain cases by the Court of Session. Emergency orders dealing with access, which are provided for both in the English and in the


Scottish new clauses, will be dealt with by the sheriff rather than by a justice of the peace. Other than in the very special case of place of safety orders, justices of the peace do not normally have a role in Scottish child care law and arrangements can be made for a sheriff to consider the case in the short time scale required.
The provisions relating to voluntary organisations are framed rather differently. Section 16(1)(b) of the 1968 Act provides that a local authority may resolve to transfer parental rights and duties to a voluntary organisation having the care of the child. Where such a voluntary organisation subsequently terminates access to the child, the voluntary organisation must notify the parent or guardian properly as provided in new section 17A(1). That parent or guardian will then have recourse to the sheriff if required. There is no need to make specific application of the legal aid legislation for the purposes of the amendments in Scotland. The new provisions will fall within the Scottish legal aid scheme.
I am sure that these explanations of the differences between Scotland and England have helped the House to realise why we need these amendments paralleling the English amendments in this part of the Bill. Access to children in care and the rights of parents and guardians are important matters. I commend the two amendments, together with my hon. Friends' amendment to the English legislation, to the House.

Amendment agreed to.

Amendments made: No. 2, in page 10, leave out lines 34 to 43 and insert—
'17A.—(l) A local authority or voluntary organisation may not terminate arrangements for access to a child who is the subject of a resolution under section 16 of this Act by his parent or guardian or refuse to make such arrangements unless they have first given the parent or guardian notice of termination or refusal in a form prescribed by order made by the Secretary of State.
(1A) A notice under this section shall contain a statement that the parent or guardian has a right to apply to the sheriff for an order under section 17B of this Act.
(1B) A notice terminating access shall state that access will be terminated as from the date of service of the notice.
(1C) A local authority or voluntary organisation are not to be taken to terminate arrangements for access for the purposes of this section in a case where they propose to substitute new arrangements for access for existing arrangements.
(1D) A local authority or voluntary organisation are not to be taken to refuse to make arrangements for access for the purposes of this section in a case where they postpone access for such reasonable period as appears to them to be necessary to enable them to consider what arrangements for access (if any) are to be made.'

No. 29, in page 11, line 36, leave out '28' and insert '7'.—[Mr. John MacKay.]

Clause 8

SECURE ACCOMMODATION FOR CHILDREN IN SCOTLAND

Mr. John MacKay: I beg to move amendment No. 33, in page 14, line 31, leave out from 'without' to end of line 33 and insert
'the authority of a children's hearing or of the sheriff'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments 34, 32, 35 to 37, 11, 13, 14, 26 to 28.

Mr. MacKay: These amendments and clause 8 contain a number of important changes to the Social Work

(Scotland) Act 1968, making new provisions to the law in Scotland in relation to the use of secure accommodation for children. It is intended to achieve fundamentally the same effect as the provisions in the Criminal Justice Act 1982, as further amended by this Bill for England and Wales. However, because of the different circumstances in Scotland, the provisions of the clause are rather different. In particular, they give a central place in the decisions on the use of secure accommodation to the children's hearings, since it is in that forum that decisions are taken on children who are in need of compulsory measures of care in Scotland.
It might be worth reminding the House that, unlike England and Wales, we do not have juvenile courts in Scotland. What we have is a system of children's hearings where three members drawn from the public sit and listen in a non-judicial environment to the problems that the child has had in relation to an offence or to a problem of care. The children's panel members listen to the child and the social workers involved, and the parents are also present. I have attended, as an observer, some children's panel hearings in Scotland. I am always impressed by the amount of care and attention that the members of the panel give to considering the case and to seeing how they can work with the parents and the child to find the best solution to the child's problem. Anybody interested in child care would be welcome to come to Scotland to see the way that we conduct the children's panel system. It is a system unique in Europe, and possibly in the world.
The general policy behind what we are discussing tonight is to put beyond doubt, in the light of the advice of the Scottish Law Officers—the Solicitor-General and the Lord Advocate — that current law practice in Scotland on the use of secure accommodation for children is compatible with the European convention on human rights. Any decision to place or keep a child in secure accommodation should either be taken in an appropriate judicial form or be subject to early judicial review.
Usually in Scotland judicial reviews should be undertaken by a children's hearing, subject to the usual rules for references of cases to the sheriff's court for the establishment of grounds, or on appeal. In certain cases where the sheriff is directly involved, for example in the case of safety warrants, new arrangements are proposed for decisions by the sheriff on the use of secure accommodation. My right hon. Friend the Secretary of State for Scotland should approve secure accommodation, which is accommodation for restricting the liberty of children. That would usually be in certain list D schools and assessment centres.
8.30 pm
I wish briefly to outline the scheme that my right hon. Friend the Secretary of State proposes to implement through the detailed amendments before us. It will be possible to place the child in secure accommodation only if specified criteria are satisfied. The case of any child placed in secure accommodation must be referred quickly to a children's hearing. If the child is not already subject to a supervision requirement, that will be done by a referral on the grounds that the child is in need of compulsory measures of care.
If the child is already under a supervision requirement, the referral will be for a review of the requirement to determine whether the conditions need to be changed. The parents must be notified and they or the child will have the


right to require an even more rapid review of the placement. A children's hearing may impose a condition that authorises placement in secure accommodation only if it is satisfied that the specified criteria apply. Such a condition will only authorise the use of secure accommodation. The decision whether it is necessary for the child to be placed there, and for how long, will be taken by the head of the residential establishment with the agreement of the director of social work. Such conditions will be subject to more frequent review by hearings than supervision requirements themselves.
On amendment No. 33, the present wording of the new section 58B(1)(a) in clause 8 gives the Secretary of State an obligation to prescribe the maximum period during which a child may be kept in secure accommodation
without a condition under section 58A(3) of this Act being imposed"—
that is, a condition authorising the use of secure accommodation attached to a supervision requirement from a children's hearing. However, such a condition is not the only authorisation that will permit the keeping of a child in secure accommodation. Place of safety warrants issued under sections 37, 40 and 42 will also have that effect. It is therefore necessary to alter the subsection to refer to the maximum period that can pass before proper authorisation by a hearing or a sheriff is obtained—not simply before a supervision requirement with a relevant condition is imposed.
Amendment No. 34 is in two parts. The first, by amending new section 58B (2), gives a child placed in secure accommodation greater rights; the second, by adding a new subsection (3) to section 58B, ensures that a child may be kept in secure accommodation while the grounds for his referral are tested at a hearing before a sheriff.
As presently drafted, clause 8 (2) lays an obligation on the Secretary of State to make regulations to give a parent whose child has been placed in secure accommodation the right to require that such placement be reviewed by a children's hearing even more rapidly than will be required in the normal course of events. The sole change made by the amendment is to give that right also to the child himself. That will mean that when a child is placed in secure accommodation without formal authorisation by either a children's hearing or a sheriff, although his case will have to be referred to a hearing for a decision within a fairly short period—the present intention is for seven days—the child or his parent can ask for what will be virtually an immediate review of the placement by a hearing.
The second part of the amendment adds a new subsection which applies where a child is referred to a children's hearing as in need of compulsory measures of care, and where the child or his parents do not accept the grounds on which that referral is made. Under section 42 of the Social Work (Scotland) Act 1968, the case then has to go to a sheriff within 28 days in order to determine whether the grounds are established. There may be cases in which, although the grounds of referral are being contested, the hearing is satisfied that the criteria for placement in secure accommodation apply to the child. It therefore seems necessary to give the hearing power to authorise the placement of the child during the period before the sheriff's determination—a period of no more than 28 days.
Amendment No. 32 is a technical amendment, designed to clarify the position on review of a condition authorising the use of secure accommodation. It provides that such a condition must be reviewed when the supervision requirement to which it is attached is reviewed. However, it also makes it clear that it can be reviewed separately, and the regulations to be made under the following subsections will ensure that such conditions are reviewed more frequently than the normal supervision requirement.
Amendments Nos. 35 and 36 rectify the use of the word "condition" to refer to the criteria for the use of secure accommodation which are set out in section 58A(3). In view of the fact that the main authority for the use of secure accommodation will be a condition attached to a supervision requirement, the use of the term here to relate to what are the criteria for the imposition of such a condition would be confusing.
Amendment No. 37 makes it possible to provide by regulation for an orderly transition to the new arrangements for the use of secure accommodation for children. The main use which it is intended to make of the provision is to extend slightly the period after the corning into operation of the new Act and regulations, during which all children who are currently in secure accommodation must have their cases dealt with by a children's hearing and decisions made on whether continued placement in secure accommodation is justified in the light of specified criteria. If no such transitional arrangements were made, there might be an unnecessary rush in trying to cope in a period of one week with the referral to children's hearings of all children currently in secure accommodation, as well as all those coming forward to hearings under the normal arrangements and in need of compulsory measures of care. The transitional arrangements will simply mean that there will be a slight delay—perhaps of two or three weeks—before the new arrangements apply to all the children in secure accommodation in Scotland.
With that explanation, I commend the amendment to the House. It will improve the legal position of both parents and children over secure accommodation for children in Scotland.

Mr. Newton: It would be sensible for me to say something about the amendments linked with those which my hon. Friend the Under-Secretary of State for Scotland has introduced. These are Government amendments Nos. 11, 13, 14, and 26 to 28. which concern the secure accommodation provisions as they apply to England and Wales.
In the case of England and Wales, the basic legal change was made last year in the Criminal Justice Act 1982 which introduced provision for the judicial review of local authority decisions to place children in secure accommodation—that is to say, to restrict the liberty of children in care. In Committee on this Bill, we heard a number of further suggestions about the way in which the provisions introduced in the Criminal Justice Act last year should, or could, be extended and improved.
The hon. Member for Ormskirk (Mr. Kilroy-Silk) has taken considerable interest in these matters. He sought to extend the provisions introduced in section 25 of the Criminal Justice Act 1982 to all children who may be


accommodated in community homes. Having heard his arguments in Committee, we agreed to bring forward an amendment on Report.
The provisions of section 25 of the Criminal Justice Act are at present confined to certain categories of children in the care of local authorities and introduce new safeguards in respect of those who have their liberty restricted in accommodation provided for that purpose. For the first time certain criteria will have to be met before such children may be placed or kept in secure accommodation. Moreover, all such children will have to be brought before a juvenile court, which will need to be satisfied that the criteria are met before authorising continued placement in security.
The Government were sympathetic to the view that those safeguards ought not to be restricted to children in local authority care specifically covered under the original provisions. The categories covered were those defined in section 17 of the Child Care Act 1980 — children received into care under section 2 of that Act, that is, those orphaned, deserted, without adequate care, and so on; children subject to care orders made by a court; and children remanded to care under section 23(1) of the Children and Young Persons Act 1969.
In Committee, the hon. Member for Ormskirk suggested five other categories of children to whom the safeguards ought to apply. I said then, partly to show the complexity of the law in this area, that there were at least three other statutory routes by which authorities could be given responsibility for a young person. I must now confess that even that estimate, which brought the figure close to a dozen, has proved substantially too low. During the research leading to the amendment, we found no fewer than 31 separate statutory provisions by way of which a local authority might find itself caring for a child. To include all those in primary legislation would clearly be unwieldy. Therefore, in seeking to meet the point made by the hon. Gentleman in Committee, we have sought in the amendment to enable the inclusion through subsequent regulations of all children who will need to be covered by the safeguards.

Mr. Nicholas Winterton: As my hon. Friend knows, the Select Committee on Social Services is currently undertaking an inquiry into the subject of children in care. Indeed, he appeared before the Committee only a week or so ago. He referred to 31 different statutes under which children could be maintained in care by a local authority. Does that mean that there are 31 statutes under which local authorities can keep youngsters in secure accommodation, which is the subject of this debate?

Mr. Newton: I am glad that my hon. Friend has mentioned the Select Committee, of which he is a distinguished member. The Government are certainly aware of the importance of its work and look forward to receiving its recommendations. I was pleased to have the opportunity to answer questions from my hon. Friend and others at the Select Committee hearing last week.
I should make the position quite clear to avoid any obscurity. I am not saying that there are 31 statutes under which children can be taken into care. I am sure that such a thought would horrify my hon. Friend, if only because it had not been brought to the attention of the Select

Committee. If my advisers have counted correctly the list in front of me, there are 31 statutory provisions under which children may be accommodated in community homes.
That does not mean 31 separate statutes. For example, there are two parts of the Adoption Act 1976 under which a child might find itself in this position. There are also six provisions in the Children and Young Persons Act 1969. Apart from the perhaps normal and expected ways in which children may be accommodated in community homes, there are several provisions which govern the transfer of children who may have been received into care, or the equivalent of care, in other countries. For example, a schedule to the Army Act 1955 deals with the transfer of children from Germany. Two sections of the Social Work (Scotland) Act 1968 cover the transfer of children from care in Scotland, for which my hon. Friend the Under-Secretary of State for Scotland has responsibility which is admirably exercised, to the care of local authorities in England and Wales.
8.45 pm
To put on record a helpful message which has just been vouchsafed me, there are 31 statutory routes by which a child may come into the charge of a local authority. Once in a local authority's hands, a child could find himself or herself in secure accommodation and the safeguards ought to apply. It was drawn to our attention, and we readily accepted, that the safeguards on secure accommodation introduced in the Criminal Justice Act 1982 were over-restrictively related to existing child care legislation.
We are seeking by this amendment to create a possibility of making regulations, which we intend to bring forward in due course, to cover all children who might be in the charge of local authorities and who could in theory, and might in practice, find themselves in secure accommodation. We want to make sure that in all appropriate cases any decision to place them in secure accommodation will be subject to the legal safeguards which we are introducing.

Mr. Richard Page: First, may I apologise to my hon. Friend for not being here for the earlier part of his remarks? I hope that my question will not interrupt his train of thought. He has told us that there are 31 routes by which a child may be taken into care. I have a constituency problem where a child has gone into care for family reasons; the family want the child to come out of care but the child wishes to stay in care. I should be grateful if my hon. Friend could tell me whether the wishes of that child will be taken into account or whether they will be overruled by the system and the parental wishes.

Mr. Newton: My hon. Friend will recognise that he is ranging a little beyond the confines of secure accommodation. Nevertheless, the point is important. It is difficult to make a judgment about a specific case without going fully into the circumstances. Therefore, I would be reluctant on this, as on other individual child care cases, to attempt to give an off-the-cuff judgment in response to his question without knowing all the circumstances and therefore without being sure which legal provision would cover the case. The major consideration required of those taking decisions about children in care, whether local authorities, voluntary


organisations or the courts, is the welfare and the interests of the child. It is also appropriate to consider the balance of rights, duties and responsibilities among all the parties.
I am certainly willing, although it may not be easy in the next few weeks, to consider the problems raised by my hon. Friend. No doubt he has written to the Hertfordshire local authority about the matter. Certainly I would want to steer any representations that he may make to the local social services department in the first instance because it is primarily its responsibility to determine what decisions must be taken about a child in its care, subject to the parents' legal rights and the decision of the courts. As I have said, from what he has told me, I cannot be sure about those circumstances.
It would he unwieldy to include in primary legislation the various means by which a child might become liable to be placed in secure accommodation. Therefore, we are dealing with the problem by providing ourselves with the power to make regulations. The amendment also seeks to provide some technical improvements to the original section of the Criminal Justice Act 1982 and to enable some categories of children to be excluded from the provisions.
When undertaking to table a Government amendment on Report, I drew particular attention to children arrested or detained by the police and placed by them with a local authority. I said that we did not envisage the regulations applying in those cases. In one circumstance, a detained or arrested child must be released within eight days or come before a justice of the peace before that time. In another, when a child is arrested by the police he must be brought before a magistrates court within 72 hours. Therefore, specific provisions already safeguard the position of such children for whom a local authority home is used by the police in preference to a police or prison cell. Therefore, the amendment in subsection (7) provides for some categories of children to be excepted.
Because of the substantial nature of the changes and additions to the original provision, we thought it best to table a redrafted clause that fully sets out the new provisions. That has the merit of consolidating them in this Bill rather than having them spread between it and the Criminal Justice Act. That is the explanation of what the House might otherwise have thought slightly odd. We are seeking on Report by a subsequent amendment connected with this one to repeal section 25 of the Criminal Justice Act and to incorporate the provisions in what I hope will shortly become this year's Health and Social Services and Social Security Adjudications Act. In both cases the provision will insert a new section 21A in the Child Care Act 1980.
Right hon. and hon. Members may be aware that we have recently laid before the House regulations which fill out the detail of the basic legal provision about the need for a judicial review of decisions about secure accommodation. In the debates on the Criminal Justice Bill, I was asked by the hon. Member for Ormskirk for a concrete undertaking on when regulations would be produced. I got to my feet at this Dispatch Box about eight or nine months ago and said, in the most cautious way that I could devise, that we hoped to be able to lay them before the House by the late spring of 1983. They have now been laid before the House and will come into effect on 24 May. Had we lost another week, I should have had to admit that they would come into effect in early summer rather than

late spring. However, in the absence of the hon. Member for Ormskirk, I hope that hon. Members will accept that 24 May can legitimately be called late spring.
The regulations specify 72 hours as the maximum period that a child in local authority care may spend in security before coming be fore a juvenile court, and three months as the maximum period that a court may authorise the continuation of such a placement in the first instance. On second and subsequent applications the court may authorise placements of up to six months. The regulations also set out exceptional cases where the criteria are not to apply to children remanded to local authority care.

Mr. Nicholas Winterton: As this is a matter of deep concern to many hon. Members on both sides, will the Minister say whether in his view there is sufficient secure accommodation to meet the possible requirements that might arise? As my hon. Friend said, the young person who has been placed initially in secure accommodation has to come before the court within 72 hours. He or she can then be remanded in secure accommodation for a longer period. Is my hon. Friend prepared to give the House an assurance that there is adequate secure accommodation to ensure that this legislation and the current regulations can be implemented, not only for the benefit of the young people concerned who may require them for their own advantage, but for the benefit of society as well?

Mr. Newton: My hon. Friend will probably agree that it would be a rash social services Minister who stood at this Dispatch Box and gave an absolute assurance on a matter where the extent to which accommodation was needed depended on a combination of decision-making by the local authorities and the courts. There can be no absolute assurance, because there is no way of knowing the precise number of children who might be affected by these provisions.
As my hon. Friend will know, for some years now there has been a programme of Government assistance to local authorities in the form of grants for the creation of secure accommodation, and our general judgment is that adequate secure provision exists, with the possible exception of one region, the west midlands, as assessed by the children's regional planning committees over the past few years. That is the best judgment that we can make, on the evidence that is available to us.
The pressure to introduce these provisions for a judicial review has been animated by a feeling that too many children are placed in secure accommodation without proper safeguards rather than too few. We shall have to wait and see what follows the implementation of the regulations to which I referred, and what the effect will be on numbers. However, it seems possible, and it is expected by those who have urged us in this direction, that the net effect will be to reduce and not increase the number of children put into secure accommodation, once the courts have to review such decisions in this new way. In logic, I do not expect that the new provision will add to the pressure on secure accommodation. Indeed, the reverse may be true.
As my hon. Friend will know, a number of other proposals exist which are not directly involved in this discussion and which could lead to an increase in the need for secure accommodation—for example, the proposals to end the remand to prison of 15 and 16-year-olds—but


decisions on those proposals have not yet been implemented and they are not necessarily involved in this matter.

Mr. Nicholas Winterton: I thank my hon. Friend for that reassuring response. Will he tell the House what representations have been made to him and his Department by juvenile magistrates and the Magistrates Association on this matter, because I believe that they have some strong views about it?

Mr. Newton: At this stage I do not want to enter into a lengthy exchange about our consultations with the Magistrates Association or juvenile justices, but certainly we engage in consultation and discussion with them, and I know that they would welcome not only this provision for judicial review of decisions about secure accommodation, but the amendment to give the possibility of appeal to the courts for parents whose access to their children is terminated. It is perhaps the way of the world that the Magistrates Association believes that the courts have a part to play, perhaps a larger part than in the past, in some of the decisions about children in care. Therein lies a broader argument, on which I touched earlier. It would be inappropriate for me to re-enter it. I take it that my hon. Friend understands what I am seeking to say.
I can, if the House wishes, give further details about the other amendments in this group, but at this stage it would be sensible for me to allow the House to take on board what I have said and consider the broad thrust of the amendments.
However, there is one final point, which will be new to the House and which has not previously been placed as firmly as I should like on the public record. As I have said, the new regulations will come into effect on 24 May, together with part I of the Criminal Justice Act 1982. When informing the local authorities of the effect of the new provisions concerning the management of their secure accommodation in a circular, we took the opportunity of implementing a step that we have had in mind for some time, which is the final phasing out of the single separation rooms that are sometimes used to restrict children's liberty in community homes. Those single rooms are generally considered to be a less than satisfactory way of achieving control of or disciplining a child. Many authorities have discontinued their use. We wish their use to be discontinued. Over the past few years there has been a 30 per cent. reduction in the number of such rooms. Now there are only about 60 in use in all. We have decided that as from the end of this year their use will no longer be approved by the Secretary of State. I think that that step will be widely welcomed on both sides of the House.
As I have said, the amendments will enable the regulations that I have discussed to be re-enacted, together with others that will extend the safeguards to the considerably broadened categories of children that I have already mentioned, except only those specifically covered by other provisions. I hope that the amendments meet the wishes of the House.

Amendment agreed to.

Amendments made: No. 34, in page 14, line 39, leave out subsection (2) and insert—
'(2) The Secretary of State shall by regulations make provision to enable a child who has been placed is secure accommodation under section 58(A)(4) of this Act or his parent

to require that the child's case be brought before a children's hearing within a shorter period than would apply under regulations made under subsection (1)(a) of this section.
(3) Where, in any case, a children's hearing direct the reporter to make application to the sheriff for a finding under section 42(2)(c) of this Act (finding that grounds for referral are established), they shall have power, if they are satisfied with regard to the criteria specified in paragraph (a) or (b) of section 58A(3) of this Act, to authorise the detention of the child in secure accommodation in a named residential establishment, pending the determination of the case in accordance with section 42(5) or (6) of this Act.'

No. 32, in page 15, line 10, leave out 'or', and insert 'and may be reviewed'.

No. 35, in page 15, line 40, leave out from 'satisfied' to 'authorise' in line 42 and insert
'with regard to the criteria specified in paragraph (a) or (b) of section 58A(3) of this Act,'.

No. 36, in page 16, line 3, leave out 'conditions' and insert 'criteria'.

No. 37, in page 16, line 18, at end insert—
'58G. Regulations made under sections 58A to 58F of this Act may include such transitional provisions as the Secretary of State may consider necessary, including provisions varying the application of any provision in those sections for a transitional period, either generally, or in relation to specified classes of cases.'.—[Mr. Kenneth Clarke.]

Schedule 2

MISCELLANEOUS AMENDMENTS RELATING TO CHILDREN AND YOUNG PERSONS

9 pm

Mr. John MacKay: I beg to move amendment No. 30, in page 37, line 37 at end insert—

'Children Act 1958 (c. 65)
1A. In section 7 of the Children Act 1958 (removal of foster children kept in unsuitable surroundings) for subsection (4) there shall be substituted the following subsection.
(4) A local authority may receive into their care under section fifteen of the Social Work (Scotland) Act 1968 (duty of local authority to provide for orphans, deserted children, etc), any child removed under this section, whether or not the circumstances of the child are such that they fall within paragraphs (a) to (c) of subsection (1) of the said section 15 and notwithstanding that he may appear to the local authority to be over the age of seventeen.".'.

This is a technical amendment to section 7(4) of the Children Act 1958, which now — following the enactment of the Foster Children Act 1980 for England and Wales— applies only to Scotland. The purpose of the amendment is to reinsert the original policy intention behind the section.

Section 7(4) empowers a local authority to receive into its care under section 15 of the Social Work (Scotland) Act 1968 any child who is privately fostered and who, in the view of the local authority, is kept in unsuitable surroundings. The amendment makes it clear that the local authority can do this whether or not the circumstances of the child are such that he would normally come within the categories of children who would be received into voluntary care. Section 7(4) originally applied that provision in relation to the Children Act 1948, but in subsequent amending legislation the powers of local, authorities in that respect were unintentionally narrowed.

This difficulty came to light during consideration of proposals to consolidate the law on private fostering in relation to Scotland. The amendment will pave the way for what I hope will be an early introduction of a consolidation Bill in this area.

Amendment agreed to.

Mr. John MacKay: I beg to move amendment No. 31, in page 38, line 13, at end insert—
'3A. In section 20 of that Act (duty of local authority to further the best interests of a child in their care)—

(a) in subsection (1), for the words ", the local authority" there shall be substituted the words "or of a voluntary organisation, they";
(b) in subsection (2), for the words "the local authority" there shall be substituted the word "they", and after the words "the local authority", there shall be inserted the words "or voluntary organisation"; and
(c) in subsection (3), after the word "authority", there shall be inserted the words "or voluntary organisation", and for the words "section 17(3)" there be substituted the words "sections 17(3), 17(3A)".'.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take Government amendment No. 12.

Mr. MacKay: This amendment ensures that what is commonly called the welfare principle is applied by voluntary organisations in Scotland to their responsibilities for children in their care under the Social Work (Scotland) Act 1968.
In essence, the welfare principle requires a local authority, when taking decisions about children in its care, to take the best interests of the child as the first consideration. At present, that applies only to local authorities. However, it is possible for a voluntary organisation to have children legally in its care under part II of the 1968 Act. It is now also possible for the parental rights and duties to be vested in such a voluntary organisation. It seems appropriate that any action by such a voluntary organisation should be governed by the welfare principle as is a local authority.
We have consulted bodies that represent various voluntary organisations in Scotland. They welcome the amendment, which simply puts into legislation what already happens as a matter of good practice. It achieves the same as the similar amendment that has been tabled for England and Wales, and I have much pleasure in moving it.

Amendment agreed to.

Amendments made: No. 11, in page 45, line 46, at end insert—
'47A. The following section shall be substituted for section 21A of that Act—

"Use of accommodation for restricting liberty
21A.—(1) Subject to the following provisions of this section, a child in the care of a local authority may not be placed, and, if placed, may not be kept, in accommodation provided for the purpose of restricting liberty unless it appears—

(a) that—

(i) he has a history of absconding and is likely to abscond from any other description of accommodation; and
(ii) if he absconds, it is likely that his physical, mental or moral welfare will be at risk; or

(b) that if he is kept in any other description of accommodation he is likely to injure himself or other persons.

(2) The Secretary of State may by regulations—

(a) specify—

(i) a maximum period beyond which a child may not be kept in such accommodation without the authority of a juvenile court; and
(ii) a maximum period for which a juvenile court may authorise a child to be kept in such accommodation;


(b) empower a juvenile court from time to time to authorise a child to be kept in such accommodation for such further period as the regulations may specify; and
(c) provide that applications to a juvenile court under this section shall be made by local authorities.

(3) It shall be the duty of a juvenile court before which a child is brought by virtue of this section to determine whether any relevant criteria for keeping a child in accommodation provided for the purpose of restricting liberty are satisfied in his case; and if a court determines that any such criteria are satisfied, it shall make an order authorising the child to be kept in such accommodation and specifying the maximum period for which he may be so kept.
(4) On any adjournment of a hearing under subsection (3) above a juvenile court may make an interim order permitting the child to be kept during the period of the adjournment in accommodation provided for the purpose of restricting liberty.
(5) An appeal shall lie to the Crown Court from a decision of a juvenile court under this section.
(6) A juvenile court shall not exercise the powers conferred by this section in respect of a child who is not legally represented in that court unless either—

(a) he applied for legal aid and the application was refused on the ground that it did not appear his means were such that he required assistance; or
(b) having been informed of his right to apply for legal aid and had the opportunity to do so, he refused or failed to apply.

(7) The Secretary of State may by regulations provide—

(a) that this section shall or shall not apply to any description of children specified in the regulations;
(b) that this section shall have effect in relation to children of a description specified in the regulations subject to such modifications as may be so specified;
(c) that such other provision as may be so specified shall have effect for the purpose of determining whether a child or a description specified in the regulations may be placed or kept in accommodation provided for the purpose of restricting liberty.

(8) The giving of an authorisation under this section shall not prejudice any power of any court in England and Wales or Scotland to give directions relating to the child to whom the authorisation relates.".'.

No. 12, in page 46, line 33 at end insert—
'51A. The following section shall be inserted after section 64 of that Act:—

"General duty of voluntary organisation in relation to children in their care.
64A. — (1) In reaching any decision relating to a child in their care, a voluntary organisation shall give first consideration to the need to safeguard and promote the welfare of the child throughout his childhood; and shall so far as practicable ascertain the wishes and feelings of the child regarding the decision and give due consideration to them, having regard to his age and understanding.
(2) In providing for a child in their care a voluntary organisation shall make such use of facilities and services available for children in the care of their own parents as appears to the organisation reasonable in his case.".'.

No. 13, in page 47, line 4 leave out
'(2) of that Act (regulations and orders)'
and insert
'of that Act (regulations and orders)—
(a) in subsection (2),'
No. 14, in page 47, line 6 at end insert
`and (b)in subsection (4) after "11" there shall be inserted 21A". '—[Mr.John MacKay.]

Schedule 4

REGISTERED HOMES

Mr. Kenneth Clarke: I beg to move amendment No. 15, in page 58 , line 38, at end insert—
(aa) as to the numbers and qualifications of staff to be employed in such homes;
(ab) as to the numbers of suitably qualified and competent staff to be on duty in such homes;'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 16, 19 and 20.

Mr. Clarke: We have now reached that part of the Bill that deals with the improvements that the Government are making in the registration arrangements in England and Wales for voluntary and privately run residential and nursing homes. The Government readily acknowledge the valuable contribution that many private residential care and nursing homes make to the care of the elderly. We believe that it is important, if we are to make proper provision for rising numbers of elderly people, to encourage the growth and increased contribution of such homes.
At the same time, it is important to keep the proprietors of homes in close contact with local statutory bodies, especially local authorities and their social services departments, and, in the case of nursing homes, with health authorities. It is also important to ensure that the right standards are maintained because we want to ensure that, when elderly peple go into a residential home, they can be assured of an adequate quality of accommodation and staffing. When they go to nursing homes, they should be assured of adequate accommodation, staffing and the right level of nursing skill and care. That is why we introduced proposals which greatly improve the registration arrangements.
As well as primary legislation, we shall update regulations that will contain the most explicit requirements about the standards that must be provided for the care of elderly and frail residents. I am glad that a code of practice is being produced by a working party. That will ensure that the best practice is spread throughout all residential care and nursing homes.
In Committee, some hon. Members tried to improve the powers that we were giving ourselves to make regulations to ensure that they covered explicit concerns of their own. The amendments in this group honour the undertakings that were given to the right hon. Member for Norwich, North (Mr. Ennals) in Committee. Amendment No. 15 confers explicit powers to make regulations that govern staffing of a registered residential care home. We have already reached the stage of issuing a consultative note on the regulations. It proposes that the regulations should require, as appropriate,
the size of the residential care home and the number, age, sex and condition of the residents
and that there should be
suitably qualified and competent staff to be available by day and night in numbers which are adequate".
We had to take an explicit power to include that type of requirement in the regulations when they were finally drafted. Amendment No. 20 makes similar provisions for voluntary children's homes that are registered under the Child Care Act 1980.
Amendment No. 16 confers the explicit power to make regulations governing the absence of more than four weeks

from a residential care home of the person registered in respect of that home. We decided that it would be best to specify the detailed requirements in the regulations proposed rather than to set them out in a schedule. In the regulations we propose to provide that notice of intended absence from the home shall be given to the registration authority at least one month before it occurs, unless the authority agrees to a shorter period. If the absence arises from an emergency, the notice should be given to the authority within a week of its occurrence, unless circumstances preclude that. The notice shall state for how long the registered person will be absent, or is expected to be away, the reason for the absence and the arrangements proposed for the management of the home in his absence. Further detailed provisions will be made after the consultation process when the full regulations are produced.
Failure to comply with the requirements will constitute an offence against the regulations, which carries a maximum fine at level 4, which is at present £500. I hope that the House will add to the welcome given to this desirable part of the Bill and will approve the amendments that we have tabled following our undertakings in Committee.

Mr. Peter Griffiths: Amendment No. 15 adds two subsections to the existing subsections of clause 19(1). I have expressed interest in the matter, and discussed with my hon. and learned Friend the Minister the qualifications of persons authorised to provide care in homes established under the Nursing Homes Act 1975 — what were called old people's homes before this legislation but which will now be called residential care homes. It creates a new category of home somewhere between the two traditional ones.
Nursing homes are subject to registration, control and inspection by the area health authority. In south Hampshire, there is a requirement that such homes will have a 24-hour cover from a state registered nurse. My hon. and learned Friend will recall that I wrote to him mentioning the wish of some proprietors to provide that cover with state enrolled nurses, whose qualifications are only slightly different from those required by the area health authority. My hon. and learned Friend referred me back to the area health authority on that matter, which was resolved satisfactorily, but since the publication of the Bill, and even since the publication of the amendments, I have received many representations from those who are unhappy with the way in which the supervision may be carried out in the new residential care homes.
The amendment provides that the Secretary of State will control the numbers and qualifications of staff to be employed in such homes and the numbers of suitably qualified and competent staff to be on duty in such homes. However, the problem, as presented to me by the proprietors of nursing homes registered under the Nursing Homes Act 1975, is that the residential care homes established under the Bill will care for not only the traditional elderly people in an old persons' home, but for those listed in paragraph 1 of schedule 4, which states that the homes will
provide, whether for reward or not, residential accommodation … for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder.
I am a layman but it seems that these are persons who might well in the past not have been accommodated in


what were called old people's homes but would normally have been accommodated in nursing homes where, for example, there was 24-hour nursing cover and staff capable of dealing with the problems of those with physical and mental disabilities.
9.15 pm
I understand that in the old people's home and in the residential care home there is no requirement that there be staff with medical qualifications to supervise those who are by definition disabled. The body that is charged with the supervision of such homes and the extension of them is the local social services department. Those who carry out inspections on behalf of the department do not have medical qualifications. They are more concerned about the administrative responsibilities of the home towards the social services department, with the general application of the regulations and with ensuring, for example, that there are proper conditions for people's privacy and adequate space for cooking facilities. They are not qualified to deal with those who are disabled who under the Bill will be specifically permitted to be accommodated in residential care homes.
I appreciate that this is a late stage at which to raise these matters. However, I raised them with the Under-Secretary on a previous occasion when he assured me that they had been fully considered and that the worries being expressed by nursing home proprietors were not justified. I hope that my hon. and learned Friend will be able to give me an assurance that when disabled persons are accommodated in residential care homes, as opposed to nursing homes, they will be provided with the sort of supervision that can be given only by qualified persons, and that the area health authority will also be included in the supervision and control of such homes where disabled persons are present.
Those who are disabled, either physically or mentally, require an environment that is enriching to the quality of life. They require facilities other than mere rooms and beds. They require a proper regime that will help them to maintain and develop themselves as full, responsible members of the community. It is that assurance that I am seeking on behalf of the responsible body which presently administers nursing homes with full nursing care, the relatives and others of those who may take accommodation in residential care homes and, not least, the disabled persons who, under the Bill, may find themselves living in residential care homes, which must, therefore, have adequate accommodation and facilities to look after them.

Mr. Kenneth Clarke: I think that I can give my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) the reassurances that he seeks. We recognise that there is a clear distinction between the type of care to be provided by residential care homes and that to be provided by nursing homes. Nursing homes are specifically suitable for dealing with those who need professionally trained nursing care as well as the care and attention that they could get from sympathetic and skilled staff in any setting. For that reason the nursing home will have to satisfy the health authority of the professional competence and training of those who are giving nursing attention to the people who reside in the nursing home, whereas a residential care home will be inspected and registered by the local authority social services department, which is better

placed to judge whether the general standards of accommodation, the good order of the home, as well as the general cleanliness and attention given to the residents, justify registration.
I know that there are those in the nursing homes movement who fear that residential homes may try to intrude upon the nursing homes. However, the present law even before these amendments is adequate, under the different Acts of Parliament that govern the two types of home, to ensure that it will be illegal for anybody running a residential care home to go too far and start providing the nursing and attention that needs the approval of a health authority and registration as a nursing home.
One change that we have made in the Bill is to allow a particular home to register as both types of home. This is a new provision for dual registration because we appreciate that there are some individuals who enter a home needing the minimum amount of care and supervision because they are reasonably fit and competent but who, as they grow more elderly, may acquire medical and other problems and need nursing care. It is desirable that the rules are not too inflexible, but that it should be possible in one place to provide the whole range of care that a resident may need for the last few years of his or her life. If a home wishes to do that, and wishes to take in residents and keep them there until their death, giving them the nursing attention that they require in the last few years, it will be necessary to register both as a residential care home and as a nursing home to satisfy both the social services department and health authority and to demonstrate in the case of the health authority that the nursing staff have the competence and training that it regards as satisfactory.
My hon. Friend the Member for Portsmouth, North expressed doubts about the residential care sector—the homes that do not attempt to go into nursing—hut the Bill and the amendments extend our power to make regulations to require adequate staff and staffing numbers and to inspect them regularly. The regulations that we propose to make will particularly insist that suitably qualified and competent staff shall be available by day and night in numbers that are adequate and will require the registration authority, the local authority, to inspect the residential care home not less than once every 12 months. It will enable a local authority to carry out inspections at any time and at more frequent intervals if the local authority finds it necessary in the case of any particular home about which it has doubts.
Nobody who provides valuable care such as this to the old and the disabled need fear that other people will intrude on their province and provide a lower or inadequate form of care or be allowed to pretend that they are offering skilled nursing attention when they are not. The range of legislation that the Bill improves and extends will make sure that the best standards are maintained and will make it easier for us to go on to give that help and encouragement to those who provide nursing homes and residential care homes because, with the rising number of elderly, we shall need more of such provision of the right type. This paves the way to welcome growth in such provisions.

Amendment agreed to.

Amendment made: No. 16, in page 58, line 41, at end insert—


(ca) as to the giving of notice by a person of a description specified in the regulations of periods during which any person of a description so specified proposes to be absent from a home;
(cb) as to the information to be supplied in such a notice;'. —(Mr. Garel-Jones.]

Mr. Kenneth Clarke: I beg to move amendment No. 17, in page 60, line 37 at end insert—
'23A. In section 1 of the Nursing Homes Act 1975—
(a) the following sub-paragraph shall be added at the end of paragraph (c) of subsection (1)—
"(v) treatment by specially controlled techniques.";
(b) the following subsection shall be added after that subsection—
(1A) In subsection (1) above 'specially controlled techniques' means techniques specified under subsection (3) below as subject to control for the purposes of this Act.
(c) at the end of paragraph (e) of subsection (2) there shall be added (but not as part of sub-paragraph (iii)) the words "unless they are used or intended to be used for the provision of treatment by specially controlled techniques and are not excepted by regulations under paragraph (g) below"; and
(d) the following subsections shall be added after that subsection—
(3) The Secretary of State may by regulations specify as subject to control for the purposes of this Act any technique of medicine or surgery (including cosmetic surgery) as to which he is satisfied that its use may create a hazard for persons treated by means of it or for the staff of any premises where the technique is used.
(4) Without prejudice to the generality of section 19 below regulations under subsection (3) may define a technique by reference to any criteria which the Secretary of State considers appropriate.
(5) In this section 'treatment' includes diagnosis and `treated' shall be construed accordingly.".'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 18.

Mr. Clarke: The effect of the amendments is to confer a power on the Secretary of State to extend by regulations the range of premises that are required to register under the Nursing Homes Act 1975. The two amendments arise directly out of the great public concern that has recently been expressed about the improper use of lasers and the giving of laser treatment to patients by people who are not qualified to give that treatment or perhaps have some medical qualification but are not skilled in the use of the particular equipment that they are using on the patient. There is some evidence that that treatment has been given in premises that are not registered for use as a clinic.
The media has focused its attention on this subject. The television programme "That's Life", which is compèred by Esther Rantzen, and which is not always popular with hon. Members, has been conducting a considerable campaign on this subject for the past few weeks. Doubt is not cast about the proper use of lasers in medicine, which is well-established in several specialties. Evidence was produced by the "That's Life" programme and by other branches of the media to show that some people had been given less than adequate laser treatment. It is possible to give some forms of laser treatment in premises that are not registered for the purpose or inspected.
The Nursing Homes Act 1975 covers a wide range of establishments in the private health care sector, from large acute hospitals to small nursing homes which provide long-term care, as well as day-care clinics providing

surgical procedures under anaesthesia, endoscopy and dialysis. The laser treatments can usually be described as surgical procedures, but are not always given under anaesthesia. There was, therefore, a doubt whether the present legislation actually required the registration and therefore inspection of the procedures that were being used for laser treatment. The Government have decided to close that loophole which will enable the Secretary of State, following necessary consultation with interested parties, to ensure that by extending the definition of a nursing home premises in which certain equipment is used are required to be registered with the appropriate district health authority. The amendment does not specify lasers. The Government have taken the opportunity to extend the definition to a range of treatments and specially controlled techniques which may enable us to extend these provisions to cover other potentially hazardous techniques used in premises in connection with the treatment of patients. The Government will include within the regulations the use of lasers for surgical purposes. At the same time, the opportunity will be taken to consider whether other potentially hazardous techniques should be included. This would be a welcome improvement.
Before anyone is allowed to use the premises for such purposes the premises will have to be registered as a nursing home and the person seeking registration will have to satisfy the health authority that the applicant or any person employed or to be employed by the applicant is a fit person to be employed in the home. Furthermore, the health authority must be satisfied after examining the position, construction, state of repair, accommodation, staffing and equipment of the premises that they are fit to be used as a nursing home. The authority must be satisfied that the premises will not be used for purposes that are in any way improper or undesirable. The authority will also have to be satisfied that the home is in the charge of a qualified nurse or a registered doctor. Health authorities will be required to inspect homes for registration purposes. Should they find that the persons administering the home or in charge of the home either lack the qualifications or skills required or appear in any way to be improper persons, the registration can be withdrawn.
The effect of carrying out operations of this type in unregistered premises, where a health authority has inspected and refused registration or where registration has not even been applied for, will be that fines may be imposed to a maximum of £1,000. If the premises continue to be used, charges can be repeatedly brought and fines repeated until the abuse is stopped.
The Bill provides a welcome opportunity to close a potential loophole in the law. I am unable to comment about the specific cases that the television programme and other lobbyists on this subject have brought to the Government's attention. However, each and every complaint either against a person or about premises will be investigated by my Department, although the General Medical Council is the relevant body to deal with allegations of unprofessional conduct against doctors. I am sure that it will use its powers to the full in appropriate cases. The amendment puts the legal provisions right and will ensure that the health authorities use the powers that we are giving them. The General Medical Council will, I know, use the powers that it has and I hope that we shall not see a repeat of the fears expressed at present about the kind of treatment given by a few doctors at a few clinics in and around London.

Amendment agreed to.

Amendments made: No. 18, in page 60, line 39, leave out
'the Nursing Homes Act 1975'
and insert 'that Act.'.

No. 19, in page 61, line 22, at end insert—
'25A. The following paragraphs shall be inserted after section 5(1)(a) of that Act—
(aa) make provision as to the giving of notice by a person registered in respect of such a home of periods during which he or, if he is not in charge of the home, the person who is in charge of it, proposes to be absent from the home;
(ab) specify the information to be supplied in such a notice;
(ac) provide for the making of adequate arrangments for the running of such a home during a period when the person in charge of it is absent from it;".'

No. 20, in page 70, line 6, at end insert—
'38A. In section 60(1)(a) of that Act after the word "accommodation" there shall be inserted the word ", staff'.'. —[Mr. Kenneth Clarke.]

Mr. Kenneth Clarke: I beg to move amendment No. 21, in page 74, line 30, leave out 'welfare' and insert `social'.
This is, in effect, a drafting amendment which replaces "experience in welfare work" by "experience in social work" to enable a person to qualify for appointment to the panel of experts for the registered homes tribunals. There was some discussion about it in Committee and I think that all Committee members agreed that the rather old-fashioned term "welfare work" no longer had clarity of meaning. Everyone understands what "experience in social work" means, and we have taken this opportunity to insert a tnore up-to-date and suitable phrase into the legislation.

Amendment agreed to.

Clause 12

CONSTITUTION ETC. OF FAMILY PRACTITIONER COMMITTEES

Mr. Kenneth Clarke: I beg to move amendment No. 43, in page 19, line 3, leave out subsection (1).

Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 44 to 71.

Mr. Clarke: This enormous body of amendments arises out of an agreement that has had to be reached between the Government and the Opposition about the Bill's progress in the light of the pending general election. We are dealing with the part of the Bill that concerns the future status of family practitioner committees. That was the issue that most divided the Government from the Labour party—but not, I think, from the Liberal party—during our deliberations. There was a fundamental difference of opinion between us.
The Government wish to give independent status to family practitioner committees, but the Labour party wants to put family practitioner committees and services under the umbrella of the district health authorities and wants them to be administered in closer association with the hospital and other community health services. The Opposition are, of course, perfectly entitled to their opinion, although we differ strongly about it. At this stage of this Parliament's life, the Opposition insisted that they could not facilitate the Bill's passage if the existing

proposals for family practitioner committees remained in it. As we had no alternative and as there was no way in which an adequate debate could be held to resolve the difficulties between the two sides during this Parliament's remaining lifetime, we had to agree, with considerable reluctance, to withdraw the bulk of the provisions that we proposed for family practitioner committees.
The Government's opinion has in no way changed about the desirability of making the changes that we proposed. Indeed, the Labour party's insistence on that part of the Bill being removed has led to widespread concern among general medical practitioners and no doubt among those—although they have not yet pursued the matter so closely—in the dental and optical professions. I have received numerous representations from those involved in family practitioner committee work, asking how and why the Government have had to drop the provisions.
Only this afternoon, Dr. John Ball of the General Medical Services Committee came to see me to express the British Medical Association's very strong concern about the way in which the provisions had been dropped. I gave Dr. Ball and others an undertaking, which I gladly repeat to the House today. When the Government return to office it is our intention at the earliest possible opportunity to reintroduce these provisions in a new Bill and to put them on the statute book as quickly as possible. We remain convinced that the family practitioner services would benefit most from being administered by, and under the aegis of, independent, free-standing committees whose sole concern and objective is to develop the primary care services that are the National Health Service's first line of contact with the public. I hope that that reassures the various members of the contractor professions who are worried about the present slight doubt and uncertainty in the Act brought about by the attitude of the official Opposition. That remains the fundamental position. We hope to press on with what we believe to be the desired policy as soon as we are returned to office.
Nevertheless, there are one or two small points which have never been at issue between the two parties. One reason why there is such a long list of amendments on the Amendments Paper is that we are taking the opportunity to preserve small provisions which should not give rise to any difficulty despite the clear policy division between the two sides of the House. First, we wish to put into the Bill the provision that allows for the inclusion in joint consultative committees of additional members appointed by voluntary organisations. This proposal was originally brought forward by Lord Wallace of Coslany in another place on behalf of the official Opposition. The Government welcomed it and indeed a Government amendment put the proposal into the Bill. We therefore propose that in schedule 5(4) section 22(5), as presently drafted, should be retained as new subsection 4 (a). We also propose to retain paragraphs (a) and (c) of section 26. This is important in terms of properly-based financial procedures. The two paragraphs ensure the accountability and possibly the control through audit of the accounts of family practitioner committees.
There follow in schedules 6, 9 and 10 a number of consequential amendments, but we have retained in schedule 9 the inclusion of family practitioner committees within the provisions of the Public Bodies (Admission to Meetings) Act 1960, so that the public, and in particular community health council members, will be admitted to


the non-confidential part of family practitioner committee meetings. The right hon. Member for Norwich, North (Mr. Ennals) pressed the views of the community health councils upon us in Committee. There was almost complete agreement between the right hon. Gentleman and myself because we were both anxious to ensure that the community health councils in particular had a proper and close relationship with the new family practitioner committees once they were established. We accept that once the family practitioner committees obtain the independent status to which the present Government are firmly committed at the earliest possible opportunity, they cannot stay outside the requirements of the Act. They should have the same close relationship with community health councils that other health authorities enjoy.
I hope that the Opposition will accept our minor reservations. Otherwise, this great body of amendments honours the agreement that we reached with them in order to get the Bill on the statute book.

Mr. Alfred Morris: I am grateful to the Minister for his courteous and helpful letter about these and other Government amendments to the Bill. The Opposition are glad that the Government have now agreed not to implement their plans for family practitioner committees. In our view, the decision to confer on the Secretary of State the right of appointment of all 30 members of an FPC with the exception only of the vice-chairman was a grave mistake. It would have taken local independence away from FPCs and forced them into accepting the edicts of central Government. Moreover, some recent events have made it clear that the Secretary of State's powers would not have been used either sparingly or non-controversially.
We are also opposed to this part of the Bill because the Government were seeking to achieve what should be inconceivable. They were seeking to make the FPCs into rubber stamps for the Government and at the same time to split them from the rest of the National Health Service.
The Minister admitted in Committee that the integration of primary and hospital care is the major problem to be resolved. Yet the Government's plans for FPCs could only have distanced them from the rest of the Health Service. When combined with the powers of appointment, the Government's policy was, in the view of my right hon. and hon. Friends, nothing less than a policy of divide and destroy.
Following the consultation across the Floor since the dissolution was announced, three small sections of this part of the Bill are being allowed to go through. One of them, as the Minister said, was proposed by my noble Friend Lord Wallace of Coslany in another place. In particular, we warmly welcome the agreement to extend to FPCs the Public Bodies (Admission to Meetings) Act 1960, which has been called for repeatedly by community health councils. They, as I hope is readily accepted on both sides of the House, are a source of advice that all of us should not only heed but respect.

Mr. Kenneth Clarke: We have made one or two acceptable reservations in the otherwise unfortunate deletion of the FPC arrangements. The right hon. Gentleman welcomed the fact that the Government had withdrawn their proposals for the future of FPCs. That is not the case. We have not changed our mind. We have

been obliged temporarily to withdraw our proposals because otherwise there would not be the time to get the Bill on to the statute book. But the moment that we are returned to office we shall look for an early opportunity to proceed with our policy and to give the FPCs the freestanding independence that we think they require and deserve.
I realise that the right hon. Gentleman, through unfortunate circumstances, has not taken part in earlier debates on the Bill. I wholly reject his claim that the Labour party objects to the Bill because the Government would appoint all the members of the FPCs. That has been a wholly artificial point throughout our debate. If we give independence to FPCs, that makes them accountable for substantial amounts of public money. As with similar bodies in public service, because they are accountable for such sums of money, there must be a direct relationship between them and the Secretary of State, who is accountable to Parliament. It is unworthy to suggest that the Bill is designed to make FPCs the rubber stamps of Government. That is a parody of a perfectly straightforward constitutional position, and one that would not be abused by a Secretary of State in the present Government or, I trust, any other Government.
The right hon. Gentleman also argued the case for integration between district health authorities and FPCs. I accept entirely the desirability of close relationships. I am sure that all those interested in primary health care also accept that. However, we do not believe it necessary to achieve close co-operation by making the FPCs and the administration of their services wholly subordinate to the administration of the hospital and community health care services that are bound to be the major concern of DHAs because they are the larger part of the NHS budget.
We believe that it is possible to have independent FPCs. The Government propose to take other steps, which I detailed in our debates in Committee and will detail again on a future occasion, to ensure that there is a strong and close relationship between the FPCs and the DHAs so that their independence for administrative matters does not in any way impede the desirable co-operation that should take place between them in caring for the patients.

Mr. Alfred Morris: What I sought briefly to note was that the Minister and his colleagues accepted that integration of primary and hospital care is the major problem. That was my point. I am glad that the Minister accepts that it was also a point that he made in Committee.

Amendment agreed to.

Clause 12

CONSTITUTION ETC. OF FAMILY PRACTITIONER COMMITTEES

Amendment made: No. 44, in page 20, line 4, leave out subsections (3) to (6).—[Mr. Kenneth Clarke.]

Schedule 5

FAMILY PRACTITIONER COMMITTEES

Amendments made: No. 45, in page 76, line 21, leave out paragraphs 2 and 3.

No. 46, in page 77, line 4, leave out from beginning to 'It' in line 26 and insert—
'4. In section 22 (co-operation between health authorities and local authorities)


(a) the following subsection shall be inserted after subsection (3)—
(3A)'.

No. 47, in page 77, line 27, after 'each', insert 'joint consultative'.

No. 48, in page 77, line 29, at end insert—
(b) in subsection (4)(e), for the words "not members of the authorities represented by the joint consultative committee" there shall be substituted the words "neither—

(i) members of the authorities represented by the joint consultative committee; nor
(ii) appointed by virtue of an order under subsection (3A) above; and

(c) the following subsection shall be inserted after subsection (5)"'

No. 49, in page 77, line 32, leave out '(5)' and insert '(3A)' .

No. 50, in page 77, line 35, leave out from beginning to end of line 29 on page 85.

No. 51, page 85, leave out lines 34 to 36.

No. 52, in page 85, line 41, leave out paragraphs 27 to 34.—[Mr. Kenneth Clarke.]

Schedule 6

AMENDMENT OF NATIONAL HEALTH SERVICE (SCOTLAND) ACT 1978

Amendments made: No. 53, in page 89, line 7, leave out
'in the locality of a Family Practitioner Committee'.

No. 54, in page 89, line 14, leave out 'locality' and insert 'district'.

No. 55, in page 89, line 17, leave out 'locality' and insert 'district'.

No. 56, in page 90, line 7 after 'authority', insert
'(other than a Family Practitioner Committee)'.

No. 57, in page 91, leave out lines 1 to 9.—[Mr. Kenneth Clarke.]

Clause 15

DENTAL PRACTITIONERS WHOSE REGISTRATION IS SUSPENDED—ENGLAND AND WALES

Mr. Kenneth Clarke: I beg to move amendment No. 4, in page 21, line 5, leave out
'under Part III (health cases) of the Dentists Act 1983'
and insert—

'(a) by an order under Part II of the Dentists Act 1983 (interim suspension); or
(b) by a direction or order under Part III of that Act (health cases),'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 5, 6 and 7.

Mr. Clarke: The purpose of the amendment is to extend the protection provided in clauses 15 and 16 for dentists suspended from the dentists' register on grounds of ill health to dentists subject to the new power of interim suspension which was contained in an amendment moved, with all-party support, by my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) in Committee on the Dentists Bill.
In the Dentists Act 1983 the Government have provided a new power for the interim suspension of a dentist from the dentists register before his case has been heard by the

general dental committee's professional conduct committee. That power of interim suspension will be used by the GDC only where it is necessary to protect the public, A dentist will be able to continue in business by using a locum, but he will not be able to practise himself until there has been a full hearing before the disciplinary committee. While he is suspended on that interim basis, there will have been no adverse finding against him; I presume that there will be some presumption of innocence. It would be quite wrong for his contract to be broken and his livelihood totally taken away while he is waiting for a hearing.
We expect that dentists will be able to cover themselves against that risk by personal insurance, but it could be difficult or impracticable for dentists to arrange such cover. The amendment ensures that there will be a contingency provision so that not only the dentist's contract but his income will be protected until the hearing of the disciplinary committee. The provision is paralleled by the contingency provision already in the Bill, which would enable dentists compulsorily suspended on health grounds to have payments made to them under regulations that would have to be made.
This is a desirable step. It protects the position of dentists who face disciplinary hearings and ensures that they do not suffer disastrous financial loss before any adverse finding is made by the committee. There is also protection for the public, because the provision will make the GDC readier to use its powers to suspend. It will know that, if there is doubt about the protection of the public or about the professional competence or conduct of the dentist, it can suspend that man without immediately ruining or damaging him. A proper hearing can he held and the man reinstated in practice, suspended or struck off as appropriate. Thereafter—once a dentist is suspended or struck off—there will of course be no protection at all for his livelihood. I am sure that the House will regard this interim measure as worthwhile and reasonable.

Amendment agreed to.

Amendment made: No. 5, in page 21, line 18, leave out 'under Part III (health cases) of the Dentists Act 1983' and insert—

'(a) by an order under Part II of the Dentists Act 1983 (interim suspension); or
(b) by a direction or order under Part III of that Act (health cases),'.

Clause 16

DENTAL PRACTITIONERS WHOSE REGISTRATION IS SUSPENDED—SCOTLAND

Amendments made: No. 6, in page 21, line 31 leave out
'under Part III (health cases) of the Dentists Act 1983'
and insert—

'(a) by an order under Part H of the Dentists Act 1983 (interim suspension); or
(b) by a direction or order under Part III of that Act (health cases),'.

No. 7, in Page 22, line 1, leave out
'under Part III (health cases) of the Dentists Act 1983'
and insert—

'(a) by an order under Part II of the Dentists Act 1983 (interim suspension); or
(b) by a direction or order under Part III of that Act (health cases),'.—[Mr. Kenneth Clarke.]

Clause 17

CHARGES FOR LOCAL AUTHORITY SERVICES IN ENGLAND AND WALES

Mr. Alfred Morris: I beg to move, as a manuscript amendment, amendment No. 72, in page 22, line 38, at end insert—
'(3A) For the avoidance of doubt the means of any person shall be deemed to be insufficient if (a) they do not exceed the long term rate of supplementary benefit applicable in his case and (b) the service in question is not one the cost of which the scale rates of supplementary benefit are designed to cover.
(3B) In assessing the means of a person who avails himself of a service no account shall be taken of the means of any other member of his household.
(3C) Any person who does not accept that it is reasonably practicable for him to pay the amount the authority requires him to pay for a service may apply to the county court for a judicial review.'
The amendment is about the important issue of charges for local authority services. Clause 17 is very wordy, but it appears to leave exactly the same discretion with the local authority as existed in the past.
I have two points to make. First, if a person disagrees with a local authority about what it is reasonable for him to pay, there should be a method of arbitration. Under the Rating (Disabled Persons) Act 1978, if there is an argument about the rebate to be allowed, the person may appeal to the county court. I feel that a similar provision should apply here, and I would hope that the courts would find it unreasonable for people on supplementary benefit to be charged for services.
The second question is whether, in assessing a person's means, the local authority may take into account the means of other members of the family. The assumption is that at present the authority may exercise that power under the National Assistance Act and the Chronically Sick and Disabled Persons Act, but not under the National Health Service Act. That assumption, however, has never really been tested. There is currently a case in which the husband refuses to disclose his income, but I fear that for spouses the general rules of aggregation would be held to apply.
In my view, however, those rules should not apply in the case of children and elderly parents. An adult mentally handicapped person attending an adult training centre or day centre, for example, should be assessed on his own income for any transport charge. The problems for a family in which extensive adaptation is required for a child may be more complicated. Nevertheless, the service is provided for the child, who probably has no means of his own. For clarification, will the Minister state that it would be wrong under clause 17 to take any account of the parents' capital or income?
The decision as to what it is reasonably practicable for a person to pay seems to be left with the local authority under the clause as it stands. What is the remedy if the person disagrees? Is it to ask for a judicial review? If the local authority seeks to recover the charge as a civil debt, will the court be empowered to decide that the charge is unreasonable? Furthermore, how restrictive are the words "his means"? Do they include the means of a spouse, parent, child or other relative?
The issues raised in the amendment are extremely important to some of the most needful people in Britain today. On 19 April at c. 153 of the Official Report I raised with the Minister responsible for the disabled the case of

a severely disabled woman who was being taken to court in West Sussex because she could not pay for her home out of her supplementary benefit and owed the council £30. Mr. Speaker said in the House yesterday that the sands of time were running out for this Parliament, but even now it is not too late to reflect on the worrying plight of that severely disabled woman. I am sure that the Minister for Health will agree that it is quite wrong to harry severely disabled people because they cannot afford the home help services which enable them to stay out of institutions.
I have moved the amendment on this important matter to give the Minister an opportunity to clarify some difficult issues raised by clause 17. I hope that he will be able to give a reassuring reply.

Mr. Kenneth Clarke: This amendment has made a very late appearance at a very late stage of the Bill. Nevertheless, it gives me the opportunity to clarify the basis on which we believe that local authorities should exercise their powers to levy charges for various services. I do not think that there is a great deal between the Government and the right hon. Member for Manchester, Wythenshawe (Mr. Morris) in principle, although for reasons that I shall explain we do not believe that his amendment is the right way to proceed on this.
We think it reasonable that people who can afford to contribute a reasonable amount towards the cost of a service should do so because in so doing they put more resources into the kitty and thus enable the local authority to provide more service to others. Nevertheless, we share the right hon. Gentleman's anxiety to protect the interests of those on lower incomes and would greatly prefer a situation in which charges were not levied against people on supplementary benefit, except where supplementary benefit contains an element of payment for the service. An obvious example is the person who receives meals on wheels, who might reasonably be expected to make a small contribution towards that service because supplementary benefit itself contains a small addition to cover food requirements, although this would obviously have to be within the very limited means that such a person would have.
Unfortunately, if we use the law in the way suggested by the first amendment to make it unlawful to impose charges, and the charges exceeded the long-term rate of supplementary benefit applicable, that would have a dramatic effect on the existing practice of local government and would, as a matter of law, instantly deprive local authorities of a great deal of revenue. With the assistance of the Association of County Councils and the Association of Metropolitan Authorities, we estimate that an amendment along these lines would cost roughly £25 million if it were made law tomorrow.
Our advice to local authorities has always been that we would prefer them not to charge people on supplementary benefit for most of the range of services, including home helps, which we are describing. That remains our advice, which I am happy to confirm on behalf of the Government. We hope that local authorities will, as steadily as circumstances allow, move towards the elimination of charges to those on supplementary benefit, but we accept that, as things stand, they are entitled to make a delicate choice between remitting all these low flat-rate charges and continuing to raise revenue from the charges, thereby providing a service for more people. We do not think it is


right to step in and take away a local authority's discretion by saying that it ought to provide a service to fewer people so that those on supplementary benefit may have the service totally free.
We wanted to put some protection on the face of the Bill for those on low incomes. We believe we have achieved that by clause 17(3) to which the right hon. Gentleman referred. The clause as a whole confirms the charging powers of local authorities, but subsection (3) obliges an authority to charge only the amount which it is reasonably practicable for someone to pay. That is an all-embracing, catch-all provision which will protect those on low incomes from being asked to pay an amount which they cannot reasonably be expected to afford.
One must look with concern at how low-income people are affected by charges by local authorities. Apart from the provision that we have included in the Bill, as opposed to the amendment proposed by the right hon. Gentleman, it would be useful if local authority associations prepared guidance for local authorities to try to ensure that there is less variation in practice. I am glad that the Association of County Councils has agreed to produce such guidance. When last I heard, the Association of Metropolitan Authorities was refusing to do so; I think that was partly because of a political attitude taken to other parts of the Bill. I hope it will revise its attitude, because it cannot be helpful to its members if it does not join in the effort to give reasonable guidance on the principles to be followed when operating these powers.
The final amendment seeks to provide for arbitration by the county court in any case where a person who is charged disputes his ability to pay. We have emphasised in ministerial statements that people should be charged only as much as they can reasonably be expected to pay. That should reduce the number of disputes. We do not want to open up the possibility of countless cases of litigation in the county court, which might happen. Disputes should be rare. The law already provides for these to be subject to review by the divisional court where it has been apparent that the law has been incorrectly applied and the local authority has exceeded its powers. The amendment seeks to extend the power to have a judicial review in the county court but that is defective in any event because the county court does not have the power of judicial review.
A point was raised about the means of other members of the family when assessing the means of someone who is to receive a service. I understand the point but, with respect, I think it goes too far. It must be relevant, when considering the means of a husband or wife, to consider the income of a spouse because there is a mutual obligation between a husband and wife to care for each other in times of difficulty. It must also be relevant when considering services for a child

It being Ten o'clock, the debate stood adjourned.

ESTIMATES

MR. DEPUTY SPEAKER proceeded to put forthwith the Question which he was directed by Standing Order No. 19(7) to put at that hour.

Question,
That a sum, not exceeding £49,416,525,100 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence and Civil Services for the year ending on 31st March 1984, as set out in House of Commons Paper 237.

put and agreed to.

Bill ordered to be brought in upon the foregoing resolution by the Chairman of Ways and Means, Chancellor of the Exchequer, Mr. Leon Brittan, Mr. Nicholas Ridley, Mr. Jock Bruce-Gardyne, Mr. Barney Hayhoe and Mr. John Wakeham.

CONSOLIDATED FUND (APPROPRIATION) BILL

Mr. Nicholas Ridley accordingly presented a Bill to supply certain sums out of the Consolidated Fund to the service of the year ending on 31 March 1984 to appropriate the supplies granted in this Session of Parliament, and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 151.]

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Health and Social Services and Social Security Adjudications Bill [Lords], the Local Authorities (Expenditure Powers) Bill and the Litter Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. David Hunt.]

Health and Social Services and Social Security Adjudications Bill [Lords]

As amended, again considered.

Question again proposed, That the amendment be made.

Mr. Kenneth Clarke: I have now completed the technical reasons for not accepting the amendment of the right hon. Member for Manchester, Wythenshawe. However, I hope that I have satisfied him that our intentions are the same. We hope that, wherever possible, those receiving supplementary benefit will not be charged for local authority services except those for which their supplementary benefit contains some payment. We hope that will be achieved steadily by local authorities as their resources permit and in the light of the guidance to be prepared for them by their associations. Therefore, I hope that with that undertaking we are at least both working in the same direction and that the right hon. Gentleman will agree to withdraw his amendment.

Mr. Alfred Morris: I am grateful to the Minister for giving so thoughtful a reply to an amendment of which unavoidably he had very little notice. The hon. Gentleman is clearly and strongly against charging people on supplementary benefit for local authority services where no allowance is made by his Department to help in paying for the services concerned. I mentioned the case of a severely disabled woman in west Sussex. I hope that the Minister will join me in asking the county council there not to pursue her through the courts because she cannot pay £30 for her home help. As I said, she is on supplementary benefit. She is likely to find herself in an institution if she cannot pay for her home help and is pursued for payment by the local authority.
In keeping with the spirit of the agreement reached about the Bill across the Floor, I shall not press my amendment, but there is need for more clarification. I know that the Minister will do his best to make the Government's position clear to local authorities. I hope that, for their part, local authorities will recognise that they are not reducing public expenditure by harrying people of the kind I have mentioned. In the end they will increase public expenditure by forcing people who could live in the community into hospital care. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22

ARREARS OF CONTRIBUTIONS CHARGED ON INTEREST IN LAND IN ENGLAND AND WALES

Mr. Kenneth Clarke: I beg to move amendment No. 8, in page 27, line 35, at end insert
'but the creation of such a charge shall not sever the joint tenancy'.

Mr. Deputy Speaker: With this we shall take Government amendment No. 9.

Mr. Clarke: These are two technical amendments which make clearer and fairer the provisions when a joint tenancy is made subject to a charge by a local authority.

Amendment agreed to.

Amendment made: No. 9, in page 27, line 43, leave out 'the charge' and insert

'a charge for an amount not exceeding the amount of the charge to which the interest of the deceased joint tenant was subject by virtue of subsection (5) above'.—[Mr. Kenneth Clarke.]

Schedule 8

SOCIAL SECURITY ADJUDICATIONS

Mr. Newton: I beg to move amendment No. 38, in page 94, leave out lines 20 to 23 and insert—
'(2A) One of those persons shall be drawn from the panel mentioned in sub-paragraph (1B) of paragraph 1 of Schedule 10 to this Act.
(2AA) The other shall be drawn from the panel mentioned in sub-paragraph (1C) of that paragraph.'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 39 to 42.

Mr. Newton: We come, I hope briefly, to the second instalment of the price demanded by the Opposition for facilitating the passage of this Bill. In this case, it is more than usually a ritual sacrifice, because it is dictated by the natural conservatism of the trade unions which, since 1948, have had a monopoly right to have a trade union member on panels of national insurance local tribunals and a different but somewhat comparable position for supplementary benefit appeal tribunals. Instead of these two systems of tribunals, the Bill creates a new system of unified social security appeal tribunals.
As it stands, the Bill makes provision to broaden the basis of nomination to tribunal membership. Nominations would still have been accepted from the CBI and the TUC, but we would have sought also broader nominations from groups such as RADAR, the Child Poverty Action Group, Gingerbread, and other bodies. This proposal has been strongly opposed by the TUC, which wishes to maintain its existing exclusive rights of nomination.
In the wider interests of the Bill, we have agreed for the present—I emphasise, for the present—to restore the status quo. Thus, the amendments restore the position for nominating members of tribunals and ensure that the existing rights of nomination enjoyed by the CBI and TUC are maintained. In moving the amendments, I must make it quite clear that the Government, when they are returned to power, will reserve the right to restore their original proposals at an appropriate moment.

Mr. Alfred Morris: The Minister should of course have said "if" the Government are restored to power.
These amendments preserve the present arrangements whereby one member of an appeal tribunal is representative of employed earners. We very much welcome the change to the Bill. It removes one of the major causes of our unhappiness with the Bill as originally drafted and makes new adjudication procedures much more acceptable to us.

Amendment agreed to.

Amendments made: No. 39, in page 95, line 16 leave out
'each panel shall act for such area'
and insert
'shall act for such areas'.
No. 40, in page 95, leave out lines 19 to 22 and insert—
'(1A) There shall be two panels for each area.
(1B) One panel shall be composed of persons who appear to the President to represent employed earners.
(1C) The other shall be composed—

(a) of persons who appear to him to represent employers and earners other than employed earners; and


(b) of persons who appear to him to have knowledge or experience of conditions in the area and to represent persons living or working in it. '.

No. 41, in page 95, line 24, leave out from 'any' to end of line 25 and insert
'recommendations—

(a) from such local committees representing employers or employed earners or both; or
(b) from such organisations concerned with the interests of employers or employed earners; or
(c) from such other organisations or from such persons, as he considers appropriate. '.

No. 42, in page 96, line 45, leave out 'the' and insert 'a' .—[Mr. Kenneth Clarke.]

Mr. Newton: I beg to move amendment No. 23, in page 96, line 46, at end insert—

'Administrative duties of President
1D. It shall be the duty of the President—

(a) to arrange—

(i) such meetings of chairmen and members of social security appeal tribunals; and
(ii) such training for such chairmen and members, as he considers appropriate; and

(b) to secure that such works of reference relating to social security law as he considers appropriate are available for the use of chairmen and members of social security appeal tribunals.'

Mr. Deputy Speaker: With this it will be convenient to take amendments Nos. 24 and 25.

Mr. Newton: The amendments were tabled to fulfil a commitment that I made in Committee that appropriate training and books of reference would be made available to the chairmen and members of the proposed new social security appeal tribunals. In Committee our discussion was directed to chairmen and members of SSATs. The amendments relate not only to such chairmen and members but to chairmen and members of the existing and continuing medical appeal tribunals, as it seemed to us that what was right for one was right of the other.
We have given those responsibities to the president of the proposed new structure as he will be best placed to judge what is required. It was common ground between ourselves and the Opposition in Committee that regular meetings of tribunal chairmen should be held to discuss topics of common concern. That has been included in the amendment. We have also made provision for the president to arrange meetings for tribunal members, as he considers appropriate. I hope that this enables us to end detailed discussion of the Bill on a happy note of unanimity between ourselves and the Opposition, and that the amendments will commend themselves to the House.

Mr. Alfred Morris: Amendments Nos. 23 and 25 were tabled as a result of suggestions made by my hon. Friends in Committee and are thus welcome to us.

Amendment agreed to.

Amendments made: No. 24, in page 97, line 22, leave out
'Schedule 12 to that Act'
and insert 'that Schedule'.

No. 25, in page 97, line 26, at end insert—
'10A. The following paragraph shall be added at the end of that Schedule—
9. It shall be the duty of the President—

(a) to arrange—


(i) such meetings of chairmen and members of medical appeal tribunals, and
(ii) such training for such chairmen and members,

as he considers appropriate; and
(b) to secure that such works of reference relating to social security law as he considers appropriate are available for the use of chairmen and members of medical appeal tribunals.".'.

Schedule 9

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendments made: No. 58, in page 104, line 30, leave out from beginning to end of page 105, line 6.

No. 59, in page 105, leave out lines 20 to 42.

No. 60, in page 106, line 35, leave out paragraph 19.

No. 61, in page 107, leave out lines 22 to 29.

No. 62, in page 108, line 34, leave out paragraph 32.

No. 63, in page 109, line 1, leave out 'that Act' and insert
'the Employment Protection (Consolidation) Act 1978'.

No. 64, in page 109, leave out line 6. — [Mr. Kenneth Clarke.]

Schedule 10

REPEALS AND REVOCATIONS

No. 65, in page 113, leave out lines 33 to 37.

No. 66, in page 113, leave out lines 43 to 48.

No. 67 in page 114, line 4, leave out from '""Teaching""' to end of line 17.

No. 26, in page 114, line 34, column 3, at end insert—
'In section 10(2), the words from "and may" to the end of the subsection.'.

No. 27, in page 114, line 40, column 3, at end insert—
'In section 39(2) in paragraph (c), the words "or voluntary organisation", and paragraph (e).'

No. 68, in page 115, line 10, at end insert 'and'.

No. 69, in page 115, leave out lines 13 to 16.

No. 70, in page 115, line 18, leave out from ' l' to end of line 48 and insert
`paragraph 29, and in paragraph 78(6), the words from "and, for" to "the word "Teaching"" in both places where they occur.'.
No. 28, in page 116, line 5, at end insert—
'1982 c.48. Criminal Justice Act 1982. Section 25(1).'—[Mr. Kenneth Clarke.]

Title

Amendment made: No. 71, in line 11, leave out from '1982' to `to' in line 13.—[Mr. Kenneth Clarke.]

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.

Bill accordingly read the third Time and passed, with amendments.

Local Authorities (Expenditure Powers) Bill

Not amended (in the Standing Committee).

Order for consideration read.

Ordered,
That the Bill be considered tomorrow.

Mr. George Cunningham: On a point of order, Mr. Deputy Speaker. I wonder whether it would be permissible for the Government to clarify their intentions on the Local Authorities (Expenditure Powers) Bill. As I understand it, they are not moving it tonight. Is it the Government's intention to move it tomorrow?

Mr. Deputy Speaker (Mr. Ernest Armstrong): That is not a matter for me. It is outside my responsibility.

Mr. Cunningham: Further to that point of order, Mr. Deputy Speaker. None the less, I think that it might speed the proceedings, shall we say, on other matters. [Interruption.] Right.

Litter Bill [Lords]

Order for Second Reading read.

The Solicitor-General (Sir Ian Percival): I beg to move, That the Bill be now read a Second time.
So often when consolidation Bills reach the House, we have run short of time. However, this evening when we have plenty of time I can expand a little on the Bill. I want to say how greatly indebted we are to the Joint Committee on Consolidation &c. Bills, which studies all those Bills in such detail that when we consider them we can be assured that they simply restate the law as it is. Since the Committee has done that for us, that leaves nothing for me to do except to invite the House to give the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House. —[Mr. David Hunt.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

COUNTY COURTS (PENALTIES FOR CONTEMPT) BILL [LORDS]

Ordered,
That, in respect of the County Courts (Penalties for Contempt) Bill [Lords], notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. Biffen.]

ROAD TRAFFIC (DRIVING LICENCES) BILL

Ordered,
That Standing Committee C be discharged from considering the Road Traffic (Driving Licences) Bill, and that the Bill be committed to a Committee of the whole House. — [Mr. Biffen.]

Bill considered in Committee.

[MR. ERNEST ARMSTRONG in the Chair]

Clause 1

EXCHANGEABLE LICENCES TO DRIVE MOTOR VEHICLES

Amendment made: In page 2, line 9, at end, insert:
' (3) Before making any order under subsection (2) above, the Secretary of State shall consult with such representative organisations as he thinks fit' .—[Mr. Walter Harrison.]

Clause 1, as amended, ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

Bill reported, with an amendment; as amended, considered; read the Third time and passed.

NATIONAL AUDIT BILL (changed from PARLIAMENTARY CONTROL OF EXPENDITURE (REFORM) BILL

(Queen's consent signified)

Not amended (in the Standing Committee), considered.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

BROADCASTING OF PARLIAMENT (ANNUAL REVIEW) BILL

Considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Unemployment (Forest of Dean)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]

Mr. Paul Marland: This is not the first time that I have brought the employment problems of the forest of Dean to the attention of the House, and I make no apology for doing so again this evening. Employment in that area is declining seriously. In 1979 unemployment was 1 per cent. below the national average. By October 1982 it had increased by 8 per cent. but was still 1 per cent. below the national average. The latest figures available for April 1983 show that unemployment there is 15·3 per cent., which is 2 per cent. above the national average of 13·1 per cent. My great worry about the problem is the speed at which the rate of unemployment is climbing.
The problem is made worse by the fact that Rank Xerox, which has a large manufacturing plant at Mitcheldean, announced recently that during the next two years there will be 1,200 redundancies in that factory. The Manpower Services Commission has estimated that, assuming that no new employers come into the district, unemployment in the area could rise to as high as 20 per cent.
The forest of Dean is vulnerable because it is a relatively isolated location lying between the river Wye and the river Severn. It is not an ideal place for business to prosper, as my hon. Friend the Under-Secretary may remember from his recent visit there. Furthermore, Rank Xerox is the only major employer in the district. That is not a new phenomenon, because coal mining used to be the only business in the area, As the mines were closed, luckily for the district Rank Xerox began to develop a plant at Mitcheldean, but now that the company is laying off people the ripples from that giant are far-reaching and painfully felt throughout the district.
Rank Xerox recognises that, and I pay tribute to the company for what it is trying to do to help the area and those made redundant. It was announced today that a steering committee has been set up to monitor progress and to help with the retraining of as many ex-employees as possible, and that Rank Xerox has offered to pay for the retraining. The company has undertaken to prepare a brochure advertising the buildings that will be vacant at the plant to publicise them as widely as possible. The company is also prepared to commit any further resources and expertise that may be necessary to attract new industries to the district and to use its old buildings.
Rank Xerox has set up a job search programme which in the past has succeeded in finding jobs for those made redundant, and which will do so again. I expect that the steering committee will, in the fullness of time, deal with the job security offer that the Rank Xerox employees are anxious to have along the lines of the offer made to their counterparts in the United States of America. I imagine that the initial discussions between the management and trade unions will take place under the auspices of the steering committee. To add weight to the committee and to demonstrate its genuine concern for the effect that the layoffs are having in the district, I am pleased to be able to say that Haymish Orr-Ewing, the chairman of Rank Xerox, has undertaken to chair the committee and to have the committee sit in Micheldean. I have had talks with


others working at the plant and I have found the men and women and their trade union representatives to be entirely realistic and to take a constructive view.
Competition has caused the problem. Mitsubishi and Canon are causing the difficulties at the plant. The fault does not lie with my right hon. Friend the Prime Minister and her Administration. Trade union representatives at the plant have prepared their own assessment and appraisal of the factory's future. I am pleased to say that they have been well received by the senior management of Rank Xerox.
The fact remains that 20 per cent. unemployment looms large in the forest of Dean. When I last raised this issue in the House my hon. Friend the Minister of State, Department of Industry highlighted some of the opportunities that were available for the forest of Dean under section 8 of the Industry Act 1974. Local firms have made applications for aid under the scheme. The most recent one by Watts of Lydney — a great deal of cooperation and assistance was received from the Department of Industry at Bristol—went to Whitehall, where it seemed to become bogged down. Happily, as a result of the debate, I understand that the application has been located in Whitehall and that Watts's plant at Lydney will be visited before too long.
The forest of Dean district council made a valuable contribution to combating unemployment in the district under the Finance Act 1980 by constructing and developing the Forest Vale industrial estate. That is to its credit, as is the fact that it used the 1980 Act, for the estate has been contructed at virtually no cost to local ratepayers. The district council joins me in my concern for the district and together we seek to maintain pressure for the forest of Dean to receive assisted area status.
The area is surrounded by assisted areas. In Ludlow, which is to the north, three Government agencies are putting money into the area. In south Wales, including nearby Cwmbran, there is full assisted area status. Even parts of Monmouth, which is just over the river Wye, are receiving grant aid from this Administration. These areas are seducing potential investors away from the forest of Dean.
As evidence of that I have a letter from Forest of Dean Industrial Investments Limited. Its managing director, Mr. Roger Worgan wrote:
One example of this competition involved my own industrial estate, where having sold three acres of land to a London-based chemical company, who proposed to build a two million pound Chemical Farm, creating forty new jobs. They have advised me that they are not now going ahead with the development, as they can obtain generous benefits elsewhere and have instructed me to endeavour to sell the land.
I have been told that this Administration will not consider the designation of any more assisted areas during the lifetime of this Parliament. However, the situation in the forest of Dean is changing rapidly and deserves reexamination. I am pleased with the district council's development of the Forest Vale industrial society, but I think that in some respects it could have done more. It is a pity that it did not apply to have an enterprise zone established in the area. I have been waiting since 24 March for a reply to my letter suggesting that together we should apply to have a free port established at Lydney if the Government's current experiments with free ports are successful.
My greatest disappointment is over the community programme. This programme was launched in October of last year, and to try to promote it locally, for it is undoubtedly a useful scheme, I had a large meeting in Lydney on 14 March, to which I invited representatives of the Forest of Dean district council. Sadly, my efforts were pooh-poohed by the local authority, which told me that it was organising its own scheme, that it was to be the managing agent under the community programme, and that it had earmarked 200 jobs that it was to set up in the district. Now, eight months later, despite promotion from the Gloucester jobcentre, the council has not initiated one job under the community programme.
The Socialists on this Socialist-dominated council lose no opportunity to point the finger at me and at this Administration, seeking to lay all the blame for the unemployment in the district at our door. When it had the opportunity to do something, it did the minimum. Recently, one councillor suggested that Ministers should give the council £1 million to invest in this district. Had the council initiated 250 jobs under the community programme, it could have had £1 million a year from this Administration to spend in the district. However, it has sat back and done nothing. I hope that my words will be heard on that council and that this will help it to concentrate its mind on this much acclaimed and excellent programme. The Manpower Services Commission is waiting to hear from the council.
If the forest of Dean had assisted area status, access to European funds would be available. Sir James Scott-Hopkins, our local European Member of Parliament, is willing to help in our application. Is there not some way in which access to these European funds could be given, even if we have to avoid domestic funding? Furthermore, this Administration has recently increased housing improvement grants. Would it now be possible to have funds for the regeneration of industry in selected areas, such as the forest of Dean?
Recently, the Association of Metropolitan Authorities published a report on industrial regeneration, suggesting that local authorities be allowed to raise their own funds for regeneration, which are currently limited to 2p on the rates. Perhaps, if the facility were there, the forest of Dean council could raise money through the local rate system, if we could lift that restriction.
I have seen the brochure "How to Make Your Business Grow" prepared by my hon. Friend's Department, and I find it excellent and informative, but it assumes that there is a business up and running, which can then be made to grow. The trouble in the forest of Dean is that our new businesses are going elsewhere. Will my hon. Friend take this opportunity to highlight some of the options that are now available to the forest of Dean as he sees them, and, perhaps, to consider the possibility of having a royal forest of Dean development agency?
I end as I began. In the forest of Dean we face a serious unemployment problem with a forecast of 20 per cent. unemployment. Assisted areas surround us. We are relatively isolated. The council has helped where it has seen fit, but more needs to be done. The status of the district needs to be reviewed again. May I have a commitment from my hon. Friend that his Department, all things being equal after 9 June, will join me in reexamining the case of the royal forest of Dean in detail to see what can be done specifically to help in that area?

The Under-Secretary of State for Industry (Mr. John MacGregor): I congratulate my hon. Friend the Member for Gloucestershire, West (Mr. Marland) on gaining, in the closing stages of this Parliament, the opportunity once again to debate the problems of his constituency. It shows the care and intensity with which he pursues the interests of his constituents, and his determination in pressing the claims of the forest of Dean, especially for assisted area status. He has brought delegations to see my colleagues in the Department of Industry, and he has written many letters on the subject. The House debated the subject at his instigation as recently as December.
Recently, I visited my hon. Friend's constituency and I am aware of the impact of the closure of certain large companies and, in some cases, of the redundancies made in large companies, especially Rank Xerox. As my hon. Friend said, in recent years the business of Rank Xerox has been subject to strong competition, especially at the low end of the copier market. That is life today in a highly competitive world and that will not go away. Added to that, pressures are placed on the company via Xerox in the United States, reduced profits, 40 per cent. excess capacity in the market and a trend towards automating the manufacturing processes. Therefore, the manpower required for the company's United Kingdom manufacturing operations has been and is being considerably reduced. That is the reality of the market place. The company faces commercial pressures, and the long-term future of the forest of Dean will be assured not by resisting such pressures, but rather by assisting the company in its attempt to remain competitive and to build itself up.
A more important factor is the need to build up the restructuring of the local economy and small firms must play an important part in that. I was delighted to hear what my hon. Friend said about the efforts of Rank Xerox and its chairman in recognising its responsibilities and in doing what it can to help small and new firms to grow in the area. My hon. Friend will know of the enterprise agencies in which the large companies play a part. I am sure that that is an important way forward for my hon. Friend's constituency.
My hon. Friend will recall that we visited the Contherm company in his constituency. There we saw an excellent example of two young ex-employees of the firm Duramin, which had previously been in that area, building up their business. I was delighted to see what they were doing. Much of that type of activity is important for the future of the area.
I wish to comment on Watts of Lydney and its application for selective financial assistance. Applications for selective financial assistance under section 8 of the Industrial Development Act 1982 are treated as commercially confidential. Therefore, I am unable to go into details in the House. Nevertheless, officials will be visiting the company during the course of next week to discuss the proposed project in detail. The Government will ensure that the application is speedily processed.
My hon. Friend can be assured that the Government are aware of the position in his constituency. As with other parts of the country, my hon. Friend has brought the needs of the forest of Dean to the attention of the Government and, as with other regions, it has its own reasons for suggesting a change in its position.
I shall reiterate the Government's policy on regional assistance, and why we have concluded that the forest of Dean cannot be given assisted area status today. When the Conservative party came to office in 1979, it looked for methods by which regional policy would be made more effective. Essentially, regional policy is now more selective. Assisted areas are now restricted to the areas of greatest need. This has gone a long way to removing much of the competition from assisted areas for new investment that non-assisted areas, such as the forest of Dean, have often regarded as unfair. Therefore, by reducing regional assistance, the Government have reduced the disadvantages faced by my hon. Friend's constituency. I shall come later to the point about the boundaries.
Under the Industrial Development Act 1982 we must have regard to certain criteria in designating areas. Unemployment is a major factor, although not the only factor, both within a particular travel-to-work area and relative to other travel-to-work areas. As my hon. Friend knows, the forest of Dean comprises the Cinderford travel-to-work area and a small part of the Gloucester travel-to-work area.
I shall have to give the March figures, because I am trying to make a comparison with the national figures, and I am not yet able to do that with the April figures. In March this year the unemployment rates were 14·6 per cent. for Cinderford and 10·2 per cent. for the Gloucester travel-to-work area, compared with 13·5 per cent. for Great Britain as a whole and the intermediate area average of 15·6 per cent. At that stage, even the Cinderford travel-to-work area was below the intermediate area average. My hon. Friend has referred to projected estimates, but we have been unable to take them into account in making these analyses, because we have found from experience that they often turn out to be false. Sometimes, fortunately, the expected redundancies do not occur, there is not the same number of people looking for new jobs, or other jobs take up the slack. Therefore projected estimates are unreliable and we have to rely on the actual unemployment figures.
Therefore, I should make it clear that the unemployment level in the Cinderford travel-to-work area is below the average in intermediate areas. My hon. Friend will know that other parts of the country, such as the west Midlands, have higher unemployment rates and much higher numbers of unemployed, but do not have assisted area status. Indeed, according to the March figures there are 47 non-assisted areas with higher rates of unemployment than Cinderford. Many have much higher numbers of unemployed. That is part of the problem. However, I am aware that the forest of Dean is adjacent to assisted areas across the border, and that is a particularly difficult problem.
It is inevitable that, whenever decisions are made in such a case, there will be disappointments elsewhere. There is often a problem about where the line is drawn, and we have spent much time on that aspect. My hon. Friend can be assured that the present boundaries were drawn only after the greatest and most careful consideration of all the factors. However, I take his point, and we shall keep a careful watch on the situation.
Mention of the west Midlands brings me to another important point. It is not possible to change the status of one travel-to-work area in isolation, and that is what makes the whole process so difficult. The question of assisted area status has to be put in a regional and national context. When unemployment is historically high—for


many other reasons, which have often been debated in the House — and when other parts of the country are suffering unemployment rates that are higher than those of Cinderford, but are still not assisted areas, one has to look at what I have often called the domino effect.
To grant assisted area status to Cinderford, and especially to Gloucester, would give rise to claims for equal treatment from those other areas with higher levels of unemployment and higher rates, as well as to claims from other areas from which assisted area status has been withdrawn and to claims from those that have not had that status but feel that their claims may now be made on a comparative basis. It may be that by granting one area assisted area status, its relative position is not improved and is even worsened because of the domino effect. That point must be considered carefully in the case of Cinderford, especially as many of the west midlands areas are near it. Therefore, I hope that my hon. Friend will accept that the matter is difficult and that we have been giving it great attention.
I shall comment briefly on regional policy for the future. The Government are fully committed to promoting industrial and economic development in the regions. Officials have completed the first stage of a review to examine the working of current regional economic policies and to identify ways in which regional aid might be made more effective. It is right, as my hon. Friend said, that we have said that there will be no further changes during the lifetime of this Parliament. That must be right in the interests of stability and continuity. Indeed, my hon. Friend will recognise that this Parliament does not have much longer to go. However, it is not possible to say tonight what course further work might take, or to speculate tonight on what changes might be needed. We shall continue to keep a close watch on the position in all parts of the country.
In response to my hon. Friend's last plea, if I remain in my present position and depending on how the situation in the forest of Dean develops, I shall be willing to be kept in the picture by my hon. Friend and certainly to meet him after the election to discuss it. I am sure that my successor, if he is a Conservative successor, will be willing to do so as well.
I share my hon. Friend's concern about his constituents who are unemployed now or are about to be made redundant. I shall therefore briefly outline what is currently being done. In the Cinderford and Gloucester travel-to-work areas, 148 people are benefiting from the temporary short-time working compensation scheme; 77 people are benefiting from the job release scheme; 156 applications were approved in 1982–83 for the young workers scheme; and at 31 March, 60 people had joined schemes under the community enterprise programme. My hon. Friend referred to the community programme. I know that there are now three projects in his constituency that are taking advantage of the facilities under the community programme. I listened to what my hon. Friend said about what his local authority should do about this. I admire my hon. Friend's initiative and effort, and I hope that the message he put over tonight will be taken fully on board because, as he has made clear, the money is here now.
The youth opportunities programme has done a great deal to give hundreds of thousands of youngsters a chance to learn about work at first hand. It has improved their

chances of getting a job and the youngsters taking part have thought very highly of it. About 800 young people entered YOP places between April 1982 and March 1983 in the forest of Dean. By the end of March 1983, only five young people in the 1982 Christmas undertaking group had not received an offer of training under the programme.
The youth training scheme, which will become fully operational in September, is designed to go even further. It will provide high quality training on a year-long programme, giving youngsters the basic skills they need to compete in the tight labour market of today and on which further skill training can be based. It is about developing the type of flexible well motivated work force that industry needs to become competitive.
In the forest of Dean the Manpower Services Commission is aiming to generate under this Government about 750 places under the new scheme in the current financial year, 90 of which have already been approved, with about 320 places in the pipeline. Gloucestershire county council will be playing a major role in the scheme in two main ways. It will provide a 200-place county-wide managing agency covering its own employees and a 800-place county-wide managing agency based at local colleges of further education, using small firms for on-the-job training. Of those places, 160 will be in the forest of Dean area. In addition, there will be a 120-place county-wide scheme at Hartbury college providing training in agricultural skills, and a 90-place college-based course has been approved under mode B. The majority of employers in the forest of Dean are, of course, small businesses and the county council therefore has a key role as a coordinating managing agent. Large employers in the area have also been active in training. Smith's Industries is involved in a consortium that is developing proposals for an information technology centre in Gloucester from which youngsters in the forest of Dean will be able to benefit.
I have often felt that many local areas overestimate the impact of regional policy and so fail to appreciate sufficiently not only the MSC schemes but the many other schemes available from my Department. My hon. Friend will be aware that alternative industrial support is available to firms in the forest of Dean. Aid is available under section 8 of the Industrial Development Act 1982 to assist new investment in the national interest that would otherwise not take place. Since May 1979, 34 projects in the Cinderford and Gloucester travel-to-work areas have been given £0.7 million on total project costs of £2·9 million. Under the Government's support for innovation programme a number of schemes provide assistance to encourage the application of new technologies. These schemes are available to firms in my hon. Friend's constituency. Although I cannot give him a breakdown, it is certainly important to publicise them and to make firms in his area fully aware of them. It is often forgotten that about 60 per cent. of all firms obtaining such assistance are small firms themselves, which are so important to his area.
As my hon. Friend will know, the Government have introduced a vast number of measures to help small firms, including the loan guarantee scheme, the small engineering firms investment scheme and various services such as the small firms service and the small firms technical inquiry service. All those, and many other measures, are available to small firms in the forest of Dean.
My hon. Friend referred to the booklet "How to Make Your Business Grow". I hope that he will ensure that the widest possible circulation is given to the booklet in his area because I do not believe that enough small firms have taken full advantage of all that is available. He referred to European assistance. A recent scheme under the new Community instrument now enables loans at competitive interest rates to be available in the non-assisted areas such as the forest of Dean. The change we made under the Development of Tourism Act 1969 make tourism grants available in the forest of Dean.
I assure my hon. Friend again that, despite our difficulties in granting assisted area status, we appreciate the problems in his constituency, and I repeat what I have

said about alternative means for support to industry. I know that he is doing his utmost to promote new investment throughout the area. Applications for assistance to suitable projects in the forest of Dean are most welcome and will be looked at sympathetically, within the rules for the various schemes. Finally, I am sufficiently optimistic about the future to say here and now that I, or my Conservative successor, will agree to see him after the election, together with a deputation from the forest of Dean to discuss the problems of the area.
Question put and agreed to.
Adjourned accordingly at nine minutes to Eleven o' clock.